Not Surprisingly, Americans Disagree Over Definition of Rich

An interesting economic disconnect has appeared in discussions of the Bush-era tax cuts, scheduled to expire at the end of this year, and President Obama’s proposal to let the cuts end only for those with annual household incomes of $250,000 or more. These households have routinely been described as the “wealthiest” or the “richest.”

The Wall Street Journal recently headlined a blog entry about a recent poll “Is $250,000 a Year Wealthy? Only if You’re a Democrat.” Fifty-five percent of registered voters surveyed said an annual income of $250,000 was rich; 45 percent said no.

But definitions depend on political affiliation. The pollsters said 67 percent of Democratic voters and 54 percent of independent voters considered $250,000 wealthy, while 54 percent of GOP voters didn’t.

• Forty-nine percent of registered voters nationally think the tax cuts should be extended to the middle class but not to those who earn $250,000 or more annually.
• Forty-eight percent want the tax cuts to be extended across the board.
• Three percent are unsure.

The WSJ asked readers: “Why do you think there is such divergence between parties over the wealth question?”

“Anonymous” wrote: “For those that think $250K is wealthy, try living in a major city on the coasts and supporting a family. The tax code should adjust for high cost of living areas. Unfortunately the government, in it’s [sic] myopic view, believes a family of four living in a townhome in downtown San Francisco has just as much discretionary income (and expenses) as someone who lives in a 3,000 SF ranch home on a five acre plot of land in Omaha.”

“Chaz” resonded: “If you can’t live on $250k per year anywhere in the USA that is a YOU problem.”

In Arkansas, where median household income in 2008-09 was $37,987, $250,000 is a nice chunk of change. State economist Michael Pakko reports on his blog that only 1.8 percent of Arkansas households earn more than $200,000 annually.

We think money is a lot like time. If you have two hours and a 30-minute task, your task will somehow expand to fill those two hours and you’ll feel rushed. If you and your spouse make $250,000 a year, luxuries evolve into needs and those needs will expand to take up most of that $250,000 and you’ll feel less than flush.

Maybe the ultimate measurement of wealth is this: Do you know what having enough is, and do you have it?