Define middle class

[MaineMen]

I've always wondered what exactly middle class is, what defines it, and who gets to say what defines it. Is it solely based on yearly income? Should it take into account property? Somebody could win $100million lottery, opt for a bulk pay out, and for that year they'd be upper class (the one percent) but after that they could stop working, halt their income and be unemployed. They would drop back in "class" the next year while having vastly more wealth and maybe if they had little income, collect unemployment and food stamps (theoretically). Regardless of prior income, isn't the income range broad enough that there's actually a divide between upper middle class and lower middle class? A family that makes $100k would be middle class but wouldn't be anywhere close to the wealth of a family of the same size that makes $240k.

Where do we draw the line? Is it a dead stop at $250k and the next bracket is 45%? Do we add smaller rate increase brackets to tax the additional income until it reaches, say, $1million? How do we decide the cut off number? It should get adjusted for inflation shouldn't it? (for example, in the constitution you have the right to trial by jury for any amount over $20. Which was huge back then, but now having a jury trial for that amount seems like a gigantic waste of time). Various numbers that we believe should cap off the middle class have been proposed over the years. In the Bush tax cuts bill the senate(D) version had the cut off at $200k but the house (D) version had the cut off at $250k. Obama has proposed numbers from $100k to $1m and I recently heard him mention $3m in a speech. Does middle class even stop at an even number?

Another point, If a static number is proposed, then in a number of years everybody will be upper class technically. (I grew up in a house normal sized house that we got for $13k in the sixties and would now be worth almost $300k, yep it's still there too.) My point being that $13k would've bought you a nice house then and now it will get you half way to a decent car.

The $250k number has been being proposed for a while now, but doesn't that mean it's outdated? If we adjust for inflation (Which reading my reasoning above, we have to) shouldn't a bill proposing income after $250k be taxed at 45% from 2011 now be changed to $254k? (using the 1.6% inflation and cost of living increase congress decided to give the military for 2012). Next year it would be $258,318 using the predicted 1.7% cost of living and inflation increase for 2013.

My last point is (worded as a question because I want to know your opinion), should there be an exemption for small business owners (say under 50 people) because in my opinion they have larger personal income but it's not proportional given their expenses and paying employees and stuff.

Post your thoughts and opinions about "middle class"

[southernyankeebelle]

1. I think people who have businesses with under 50 people should be considered small business.

I don't think republicans think that. There idea of a small business is a corporation. We should help small business people. Even doctors that have their own practices.

[MaineMen]

3. But what do you define as middle class?

What are your opinions on who should be considered middle class? how much money? should it be calculated like that? should it be adjusted yearly? After hitting the upper class mark whatever it is, should the rate automatically go up the full 10% or be graduated?

edit: also, in the interest of intelligent debate, could you show me where you found that republicans believe small business is a corporation?
And upon hearing corporation do you automatically think huge company? does that happen when you hear other things like LLC and the like (example, small family law firm). Any size business can incorporate. I really do want to hear both sides explain their ideas from their point of view and I am trying to make a decision for this fall, living in a swing state I see a lot of ads but there's little chance for conversation. It would be a lot more helpful if you answered the post with your opinions on the questions rather than making generalizing statements about the other side.

[southernyankeebelle]

5. Well I can't give you a clear answer to your question. I don't know that much. I just think a small

business to me would be under 50 people. My sister is a dentist and owns her own business. She would love to have health insurance for her employees but can't afford it. Also she has to pay insurance in case something happens. She has overhead for many things. Same way for a law firm. But you know the question what I would consider middle class depends on where you living. If you live in a state like NY or CA $200,000 might be middle class. Yet a place like in the south rural area that would be considered wealthy. For me $100,000 to 75,000 would be considered middle class. I am sorry I wish I could be more helpful but I don't know that much. I was just making conservation.

[MaineMen]

16. Thanks

So will your sister have to pay the fines starting in 2014? Or is she under 50 people? Will the hitting the 50 person mark and having to pay those fines be a deterrent for her if she wants to expand and open another office?

I agree, her income may be above normal but a lot of it will go right back out to Mal-practice insurance, Building lease, maintenance, Dental supplies etc. If I may make an assumption I would say most dentist offices bring in more than $200k per year in gross income. But they don't come away with nearly that much after, so would the additional tax hurt her as a business owner in lost income/bottom line?

That was one of the things I was wondering, obviously there would be a lot of pork-barrel stuff going on if there was an attempt to tailor the federal tax code state by state. So how do the DC bureaucrats make that decision for the whole nation? Is it even possible for us to do that? Should we abandon the whole idea of this class defining tax law stuff and focus more on abortion and same sex marriage rights and fixing welfare?

I just think that the whole mention of taxing based on an ideal set of classes is scary especially without any sort of baseline (which is what I've been looking for). The Democractic party might be more attractive to independents if they focused more on traditional democratic values like I mentioned above. The class warfare stuff can seem really far to the left at times like this and drive people away who might be otherwise attracted to the values of the party. I'm still open if anybody can show me some hard numbers with straight facts.

[southernyankeebelle]

19. Well lets put it this way. I think my sister did pretty well under Bush. She said if she could

have voted for him again she would have. I told her he was terrible for the people in the lower middle class and working poor. I told her we all vote for the people that is going to help their best interests. My dad was a Master Sergeant who retired from the AirForce. He died at the age of 50 and my sister was lucky to be able to get some benefits from him. Again that terrible old government again. To be honest I really don't know how much she make in her practice but you are right there is alot of overhead expenses. The thing is when something serious happens like her health her practice suffers. She had breast cancer a yr and a half ago. She was off but she had to get herself back as soon as possible. She had people depending on her. She had another dentist working for her but he left to further his education right before she found out about the cancer. She was able to find after a few weeks another dentist who was looking to only work part time. It worked out well for both of them. She worked a couple of days and my sister worked the 3 days. Now she is back full time. But she has a set of twins that are in college now. One is going to teach dental hygiene. She will have her Masters one more yr. The other twin is going to be a dentist like her mom. I think she has another 3 yrs. Both girls work very hard. They started working in her office when they were like 10 yrs old. My sister had them making out checks for their suppliers. They did very well at it. My sister would check behind them to make sure they were doing good.

You know about taxes to me isn't fair system. When you get a guy like Romney hardly paying any taxes there is something wrong with that. I am will to be he didn't pay any. I don't have a problem with millionaires. Thank god for them. But I don't think they should make it off the backs of the middle class and lower middle class. It just isn't fair. Romney is what is wrong with this country. You know everyone worries about the Federal Taxes. But people forget the state and local taxes. The states and local governments have to get their renue from someplace. People forget that. They always blame the federal.

[MaineMen]

25. I'm glad your sister is alright now.

I don't know if Romney necessarily "hardly pays taxes" because 13.1% for him is still more than most of our income, that doesn't mean he shouldn't have to pay the same per cent as us but I think people are confusing him being smart with investments and gains and thinking that that's cheating or not paying taxes. There is a reward for being smart with money, and that's getting more of it (as long as you don't break the law) but quite frankly I believe slandering him for "not paying any taxes for 10 years" is way beyond reasonable. I saw an independent accounting firm state that with the way his investments are structured, it would have been very difficult to not pay taxes for even one year. Using the same logic we could say Warren Buffet didn't pay taxes for 10 years and Steve Jobs only paid taxes every other year, since they are wealthy and don't release tax returns.

I'm confused as to where they "take it off the backs of the middle class" I know that the debate in Washington DC right now is just saying the GOP wants to cut taxes for rich, but when people say that they want to raise taxes on the middle class I can't see where they're getting that. The debate in DC is to pass the same tax cuts that we've had, and not to raise taxes on anybody, from my understanding liberals want to raise the taxes above $200k before they will pass a bill, but how can they say that the other side wants to raise taxes on the middle class?

I guess I could understand your sister's view in voting for bush. I'm trying to understand yours in saying that what Romney is doing isn't fair, but where do we choose what a fair middle class family is in DC? That's the part that I think is impossible.

State and local governments get their revenue mostly from stuff like sales tax. I know Tennessee has taxes on interest and dividends and that's it. New Hampshire taxes sales and lodging, Virginia has a 6% income tax along with sales tax and property etc.

In the 2010 census, there's been an outflow of people from New York and New Jersey because their taxes combined with federal ones approach 60% no matter what class you're in. But most states normally stick to things like sales and property tax compared to federal things.

[Progressive dog]

29. That part abpout 60% tax in NY is ridiculous

If you already know so much about how the middle class should be defined, why ask the question? I do not believe that you are open minded about this. So even though I think that this is a waste of time, my definition of the middle class is this--their income falls close to the mean (not median) of the national income. I would define it geometrically about this income, say 60% to 166% of this number.

[southernyankeebelle]

33. I have no problems with millionaires. But they get advantages that we just don't get. That isn't

fair. He gets tax breaks you and I don't get. Especially people like us. I don't have anymore children. It's just me and my husband. All I can tell you MM that any time I have a dem president we get more money back. Any time we have a republican we don't. I remember when Bush gave us all $400 or $600 dollars back and telling us to spend it. Well my husband said where do people expect the rebate is coming from. Someone is going to pay for it. Of course Bush not putting the 2 wars in the budget was not right. Then Obama puts them into the budget and the people go nuts and blaming him. Well I am getting carried away.

Yes I am happy my sister is doing much better. In fact one of the twins is getting married next month. She is a wonderful sister. But we don't talk politics any more. We went to visit another sister that lives in Ga and I said if we come there will be no politics talking. Everyone agreed and we had a ball. I always tried to tell my sister not to forget where she came from. She didn't get where she did without all of us helping her and encourging her to go to college. She was our baby sister and my other 2 sister and I may sure tht she went.

Taxes are a necessary evil. I don't hate government. I think it should help it's citizens since we pay our taxes. I believe in social security and medicare or a single payer plan. Those are things I would love to see come true for all. I don't trust wall street. We lost some of our money that was invested throughmy husband's company. So thank god for social security.

[JoePhilly]

2. Has little to do with salary or income, everything to do with current NET WORTH.

When you are rich, you can defer salary because you don't need it.

We tax capitol gains at 15%, but salary at 25% to 30%.

If you could make 100k and have it taxed at 15% versus 30%, which would you choose?

The GOP wants this to be a discussion about INCOME, because the very wealthy can take less in SALARY and push their gains into tax sheltered areas.

And that is why Mitt is the GOP candidate. If you you get a shower AFTER work, you need to pat MORE in taxes, if you get a shower BEFORE you go to the office, you need more tax breaks.

That is the GOP model.

[MaineMen]

4. That isn't answering the post though

Who do you consider rich? Anybody can invest their income, the rich could invest/defer down to $250k if they wanted. the family that has $240k income is still the same class as the family with $100k under these rules even if neither of them defer anything and without taking into account breaks for kids/students etc.

As somebody trying to decide this fall, I came to this board looking for some answers from this side, I'm interested in hearing logic from both sides but not just simple statements about the other side. I want to hear people explain THEIR OWN side.

[EvolveOrConvolve]

6. Google is your friend

You can find amazing stuff with it. http://www.barackobama.com/record/economy

Welcome to DU!

[MaineMen]

11. Referring me to a campaign's website?... Really?

If you don't want to engage in any sort of intelligent discussion please don't just refer me to a candidates own site, that's more frustrating than not having anybody respond with anything of materiel to my questions yet

[EvolveOrConvolve]

20. You seem to be making the mistaken assumption that DemocraticUnderground

actually creates policy for the Democratic party. It doesn't.

Many of us are activists, and many volunteer for the Obama campaign or other Progressive and Liberal campaigns. We wouldn't do so if we didn't believe in the words published on our candidate's campaign websites.

[MaineMen]

28. It makes sense but

I came to the voting/activist base of the party because isn't the point of elected representatives to represent your views? I wanted to see what the voters believe the policy, taxes, cuts, and spending should be; since that is what the politicians are supposed to echo.

[JoePhilly]

22. If I have 200M sitting in various accounts, I can live off the interest. I don't need a salary.

So let's compare 2 people, both make 100k a year.

Person A has more than 200M in the bank. Their 100k of income is taxed at about 15%.

Person B has nothing in the bank. Their 100k of income is taxed at about 25-35%.

And income of 100k does not necessarily make one rich. And net worth of 200M, clearly does.

And so, we have 2 people who make the same amount in income, and one of them gets a much better tax rate simply because their income came, not from work, but from wealth.

This is the easiest way to see how the playing field is uneven, tilted against the worker and towards the wealthy.

[MaineMen]

27. So you want to fix capital gains vs actually increasing the tax on income

Okay so fixing the capital gains "loophole" is reasonable. In that case the tax cut bill in Washington should raise the taxes for over $250k in capital gains not income. It seems like that would be what democrats actually want, is that correct?

Also while it would generate more revenue for the gov't, it would only be about $100b and we have an annual budget deficit of over $1trillion.

(Our income is about $3 trillion and change, but we usually spend about $5trillion per year) So that law would make a small but visible impact but there would still be A LOT of spending cuts if we wanted to balance the budget. I know a cornerstone of liberalism is reducing defense spending but our entire defense budget is only around $500b, so if you completely abolished the military we would still have roughly a trillion in deficit every year. So if you were president, what are the other cuts you'd make?

[coalition_unwilling]

34. You're still "trying to decide"??? Did you know that 1% of this country's population controls 40% of

its wealth? And that 10% of this country's population controls 80% of its wealth?

So, really, the only question that matters is this: are you in that top 1% or 10%? If so, your choice is clear. Likewise, if you are in the bottom 90%, the choice is equally clear.

And that's just pure, cold-blooded calculation. I'm also assuming you are a moral person. If you are a moral person, there's really no choice, is there? If you still think there is a plausible argument for the sociopaths in today's Republican Party, all I can say is there's little more I can say to convince you fo the error of your ways.

[Proud Liberal Dem]

7. I don't understand how $250K could be considered "middle class"

that's freakin' rich to our $70K annual! Heck, I'd even take Wisconsin Rep. Duffy's *measly* and allegedly "hard to live on" $174K! Our financial position would be totally secure at that point even if we had to pay more taxes.

[MaineMen]

12. Those numbers aren't coming from me

These numbers are coming from liberal leaders in congress, so do you think that the middle class line should be under $174k?

I know that the whole thing about the number the senate/house was giving us was that was supposed to be the 98-99% line, so this brings me to another question. If this number is so subjective, how will we ever decide on a "standard" for middle class. Because how would we determine what level of people we're targeting to grow when that level is so fluid?

[dsteve01]

8. I didn't even know

that we still had a middle class. Which is nice! Thanks, MaineMen!

[MaineMen]

13. .

Well it's not about whether or not the class "exists" but in what I've seen while I'm trying to pick who to vote for, is that Obama has a goal that everybody can be middle class and then we all prosper. I'm trying to see if there is any sort of agreement or system here on how to determine what a prospering middle class family is and how the government will restore/stimulate/grow that. Obviously there will be some outliers on either end, but if the goal is to really try and make this work, there should be some way to tell what the goal level is.

[HopeHoops]

9. Simple - You still worry about paying the bills.

It really isn't more complicated than that.

[MaineMen]

14. Then what is the entire point of the cause?

If you just relegate me to paying bills, how does that have anything to do with my original post? If middle class is based around bill paying, then that blows the whole cause away because nobody will ever have the same bills.

Edit: still even if it is all about paying bills, then what logic are they using in Washington to support tax increases on anything over $200k or $250k or the any number they pick which we still haven't found reason for yet. Is it just a nice round even number? $200k and $250k are equally as pretty but there needs to be some sort of logic/facts/research to support that number as what the proposed tax law would arbitrate as middle class. How do the people in DC decide what our middle class is?

For people asking why I'm discussing mostly numbers, is because one of the major democratic running points is to increase taxes for income above X amount, and I'm trying to find any sort of logic for the X amount. Which is why I came to a liberal forum when trying to get both sides for my decision this November.

[HopeHoops]

15. I think you summed it up nicely. Yes, that's the case.

[MaineMen]

18. So

Not saying it's your fault or anybody else's, in the end it all comes down to the politicians (who are all rich regardless of party and how much they claim to rep the middle class) deciding this.

So why is there such a hold up on passing the tax cuts again based on the necessity to insert an arbitrary sum of money defining the middle class into the bill and cut off tax breaks above that. I know the consensus would likely be that the other side wants to extend the cuts to rich people, which isn't "fair", but the whole "fair" stuff sounds like elementary school and is scaring away all important undecideds by looking too much like wealth redistribution. But in our logical discussion in above and below posts, we've seen how A) we can't find a number or any sort of reason for one, and B) that the "middle class" covers an extremely broad spectrum that the numbers being thrown around in Washington could very well be hit by.

I'm not suggesting raising the number at all, nor am I advocating lowering it. I'm asking why all of us are losing out on our tax breaks because the new bill has to have a number attached it. There should just be compromise on that so Democrats get to say they passed tax cuts and can once again return to the grass roots/core values and hash those out for the election.

[HopeHoops]

21. I've proposed this before, but will again. Either cap the tax cuts or end the cap on SS taxes.

rMoney's fond of the "goose & gander" analogy, so why is it that they're happy with not having to pay SS taxes on earnings above (what is it, $180K?) but have a problem with losing tax cuts above $250K. They can't have it both ways, and neither should we. If we extend the tax cuts for everyone, then it should come with an end to the SS tax cap. Otherwise, use the SS cap as justification for the income tax cut. They're using a double standard.

[MaineMen]

30. Because there's also a limit on SS payouts

Social security is a stipend of what your working income was to help you maintain your quality of life in retirement, so you effectively get out of it what you pay into it. The reason you don't pay SS tax over $180k is because that's the limit on what your working income would be calculated as for your payout when you retire. Somebody who has $30k income pays less total SS tax and when they retire their SS payout is lower because they paid less into it. So based on the formula, if people with income higher than $180k kept paying taxes on income above that, their payout when they retire would sky-rocket as well, the government wouldn't raise any more money off of it.

[HopeHoops]

32. Fuck the caps. All around. I don't care if you earn $15K or $15M, keep the rates the same.

Yeah, yeah, yeah, I know that sounds like Steve Forbes, but he wanted to keep the restrictions in place. If you want to simplify the tax code, make it a level playing field. The ultra-rich are running amok.

[spinbaby]

10. It's hard to define

If you define it by money, it's if you have enough that you're not on food stamps or in danger of being homeless, but not so much that you don't have to work for a living.

However, I believe class structure in America is very complex and is also based on education, taste, language, dress, etc. There are some profoundly middle class multimillionaires out there.

[MaineMen]

17. I agree

I agree, and there's a huge margin between homelessness and food stamps and not having to work. Yes it is very complex and there are definitely middle class millionaires, so this all proving how remarkably fluid the middle class is; how can we possibly nail it down to one number, and campaign on making those people pay more because it's their "fair share".

I personally know a family you could call wealthy, but for the next 4 years they're putting twins through college so there's no way that they won't have to work.

Then there's the other end, people who don't have much money but insist on shopping at department stores and having nice things but then want tax breaks if they don't have enough money because it's not fair.

Not everybody is like either of those cases, but how can we impose something like this nationally without any factual evidence.

[TBF]

23. It's the Inequality, Stupid ...

You tell me where "middle" is and who needs to be taxed. Looks crystal clear to me.

http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

[craigmatic]

24. someone making at least 36k a year for 2 people.

100k would make you upper middle class and 150k a year would make you rich.

[Blue Meany]

26. The middle class are people who own their own businesses but are not so rich that they can

avoid working in them. The capitalist class are those who are rich enough that they don't have to work. Everyone else is working class or unemployed.

[Spider Jerusalem]

31. "middle class" by definition includes:

persons working in professional (doctors, lawyers, engineers, accountants, and so on), managerial and administrative jobs; it does not include manual labourers, factory workers, or persons paid an hourly wage rather than a salary. "Middle" in the sense of "middle class" means "the intermediate socio-economic class between the upper classes and the working class"; it's what you'd call the bourgeoisie. Most Americans are not "middle class" but "working class". American politicians of both parties have been lying to people for years and convincing them that they're middle class when they aren't because it's in their interests to do so; the elimination of genuine socio-economic class consciousness in service to the great American myth of upward mobility is one of the things that's helped ensure that socialism never gained serious traction in the US, unlike in Europe.