I wanted to revive this debate considering it is such a part of the campaign rhetoric- with the charges of tax breaks for the rich, but no, they help the middle class etc.

This was my last post on this thread before:



I have been reading hard copy stuff on retirement and taxes, so I am sorry I can not post it- but a few things off hand- perhaps others will provide links if this debate continues-

First- the definition of wealth is very fluid in all the debates- alot of it centers around "1%ers"- those that are the top 1% of earners in the US- but the numbers are so huge in difference between 1%ers- a Doctor making the "cut" of a 1%er at the 350thou per year is in the same category as Bill Gates and Warren Buffet!

And since this definition applies as tax law- more than a websters like definition of rich- the Dr is treated exactly like Mr.Gates- and Mr Gates pays a much smaller percentage of his earnings, but far more in actual dollars than the imaginary Dr.

For instance- let's say the Dr is a great Dr but a poor money manager that does nothing to re-invest his income- therefore he pays the full 39.9% in taxes of his income with no deductions- whereas Mr Gates would have to fire his tax accountant if he paid anywhere near 1% of his actual increase in a year- if in fact, the goverment didn't actually pay him for earning the money!

So the definition of rich and poor is really arbitrary, and has more to do with tax code for the rich and receiving benefits for the poor than what you are I may define as rich!

So my personal definition for my own personal goals of being considered wealthy is something I lifted from Forbes mag a ways back: 60 thousand dollars a year in unearned income- in other words- not having to lift a finger while earning 69 thou a year from my investments.

My personal definition of working poor- only being able to afford the minimum apartment offered in the housing market in that area (like an efficiency) with no health care and a 500 buck car I can just afford insurance on.


What is your definition of poor and rich, and does that jibe with what the rhetoric on what rich or poor is in today's election debate?

Here's my definition: Assume you're single, take the average income for a working individual. Weight it by the Cost of Living in that area. Deduct that amount you paid for in education amortized over a number of years after you graduated. Then if you make 2 times as much you are well to do, but if you make three times that much you are rich.

If the average person, in an average area makes 50,000 then if you make 100,000 you are well to do, but if you make 150,000 you are rich. But then you should be able to deduct the amount it cost you to get your education amortized over say 10 years. And if you live in a high cost area none of this is true because that is just what it cost to live. So if you live in an area that has a 10% higher cost of living than you have to make 10% more to qualify as rich.

If you use this definition, and tie the definition of rich to the average made by all working Americans, then we could always work to make the average person's income go up and that would allow everyone to make more money before they became "rich" and had to pay taxes of the rich.

This would give new meaning to the phrase "A rising tide lifts all boats"

Wealth is indeed defined differently depending on the person asked. People can be wealthy and still be “cash-poor”. I don’t pretend to understand all the workings of liquidity, floats and all the economic mumbo-jumbo. I’ll leave that to the economists here.

Forbes calculates net worth “using share prices and exchange rates from May 21, 2001. For privately held fortunes we estimate what companies would be worth if they were public. We also include, when possible, the value of art collections, real estate and even African game parks. Fortunes are measured in US dollars --Forbes.com” to determine the richest people in the world. Since most of us don’t own multi-billion dollar companies (or African game parks!), we have to determine our net worth in smaller ways. So, even though I make a decent salary, drive a nice car, have a modest retirement fund, I also have rent payments, non-tax-deductible bills, a student loan to pay off and no property. I probably would be considered “poor” by those criteria.

I would consider myself rich if I owned a modest home (in an area of my choosing), paid my bills comfortably, bought/leased a new car every 3 years or so, had enough cash left over to put into savings or go on elaborate vacations once a year…or both… and have a retirement fund with enough in it so I could retire at age 55. At my age, living in SoCal, I’d guesstimate I’d have to earn about $200,000/year to even come close to making those goals; maybe even more (damn, 55 isn’t that far off! ). That ain’t gonna happen anytime soon!!

Boss, I need a raise!

Shoot, if any of the “working poor” around here have a car, they sure as heck don’t have insurance!! At least not in LA county!

Hmmm- not a bad stab there Heart! Does take into fact the cost of living and the cost of obtaining the means to make the salary- but not the current tax rate- which is what seperates the "real" rich and the professional rich- such as doctors or lawyers. For instance- a good business man may have 150 thou a year in actual income- and pay 20% in taxes, where a "wage slave" professional may have 200 thou a year, and pay the full 39.9% - and be both poorer in assets in income.

That is one reason why I always stick to my definition as "60 thou a year in unearned income"- after taxes- as my personal definition- because your money is earning enough money to provide you income without actual labor or service required of yourself.