A most excellent question

JP Carter wants to know the answer to an important question:

Whether they wear boxers or briefs is none of my concern. Nor do I care whether they choose to use a PC or a Mac. When it comes to Presidential candidates the one question I want answered is, “What income range is considered “middle class.”

This undefined group of citizens seems to be a favorite of politicians on both ends of the political spectrum. Reagan and Bush cut their taxes. Clinton too. Even Howard Dean appears ready to do the same if he is elected. But who are these people? Ask the janitor sweeping your company’s floors and he’ll likely tell you he’s “middle class.” Query the vice-president of marketing and he will give you the same answer. The single girls down in accounts payable and the married attorneys in the legal department will give the same response. In the land of equal opportunity, it appears, we’re all “middle class.”

But for the term is to be of any use it has to be definable. When the Presidential candidates offer to give money back to the “working poor” while promising to “soak the rich” how do we know they aren’t talking about us?

He's got some thoughts about how to think about this question, and they're worth looking at. Of course what really matters is not what he thinks rich is, but how various politicians define the word. Most pols I've seen who got pinned down to an answer usually said somewhere between $100,000 and $200,000.

Of course one of the things that people who fall victim to the class warfare jargon fail to consider is that wealth doesn't have anything to do with what you make; wealth is about what you keep. In other words, it's not your income that defines your wealth, it's your net worth. We don't have a tax that directly soaks up the wealth of someone who's living. (Although we may tax certain items of property they own.) For some reason people fail to see that wealth is accumulated over time, it doesn't just drop in your lap. And because wealth is all about accumulating resources, the income tax hurts those trying to get rich far more than it hurts those who are already there.

On another note, I get sick and tired of hearing nonsense about how the "rich don't pay taxes." I have a client worth somewhere between $18-$30 million dollars. He pays more in taxes in one quarter than I'll make in the next 8 years or so. With proper planning the rich may be able to do a good job minimizing their taxes, but short of dumping all their money in tax-exempt bonds, minimal may still be more money than you'll see in one place in a life time. (And even tax-exempt bonds may not save them. Despite the name, they're not all completely exempt.) Now I know that some people may still think that no matter how much they pay, they're still not paying "their fair share", but that's another argument. The fact is that most rich people pay quite a lot in taxes.