What is "really" rich?
posted by bitchphd
Saw this article linked by someone on twitter, with the comment "you're rich." Which, in a sense, is both true and DUH-level obvious: yes, even in America, even in NYC, $300k/year is rich. Don't be an ass.
On the other hand, once you read the article, the ass in question has a point.
But I digress. Among the many life lessons we oughta be taking from the Great Recession is that if your ability to feed, clothe, and yourself and/or your family--and your ability to see a doctor and get needed medical care--depends on your job, then your relative wealth is, in a real sense, not actual wealth. This is why back in the day, gentlemen who didn't have to work for a living freaked the fuck out about the shift from land-based to moveable wealth and encumbered their children for generations with expensive estates that forced them to start marrying the children of dirty merchants: because they knew, on some inchoate level, that the shift to a merchant-centered economy destroyed wealth as they knew it. It's also why the rich-as-shit live off income from investments, rather than spending their capital, invest broadly and internationally, and sure as shit spend $ on political donations and lobbying--because if your wealth depends on what is, when you boil it right down, a global fiction, you want it to be as "diversified" as possible, lest any one part of the fiction fall apart, *and* you want to make goddamn sure that the fiction continues to function.* (As, anger at banker bailouts notwithstanding, do we all; capitalism may piss you off, but it's nonetheless the water we all swim in, and if it dries up, we're all gonna be gasping.)
It's also why people like the asshole in the article and yours truly sometimes bitch and moan about tax rates. I don't ever bitch and moan about taxes--as a patriotic bleeding-heart-liberal with the instinctive risk-aversive conservatism of the first child, I'm completely down with the idea that you need revenue, goddamnit, in order to spend, and that spending to maintain important liberty-and-equality-fostering institutions like libraries and the ability to dial 911 in an emergency (warning: that link is to Free Republic. But it's worth it because the commenters are bitching about the very effects of their own anti-tax beliefs). But a lot of my socio-economic peers do, and they're not entirely wrong, because if your income comes from your job, then it's, well, taxable income--whereas people who are "really" rich (from this pov) may well be paying lower income taxes because a lot of their income is taxed at a much lower rate.**
Now, I'm sure as shit not a tax expert, and my parents were fully the kind of "stupid" people that conservatives (and plenty of liberals) just love to look down on: they lived hand-to-mouth, they had credit card debt they shouldn't have had, they didn't even teach their kids how to balance a checkbook. Mom has untreated mental health issues, hasn't worked in years, lives in poverty with her property-owning Freeper brother, cashed in her CA teachers' retirement and spent it all years ago, has credit card debt I don't even want to think about, and I'm not even kidding when I say that I hope she will die of some kind of smoking-related illness before she manages to run through the tiny inheritance she got from her father, whatever she inherits from her brother (which I guarantee you is what she's counting on supporting her once grandpa's tiny legacy runs out), and runs up against the limits of her ability to borrow. Dad's a little better off, because he is perfectly content to live on his CA state retirement (as long as it keeps coming, touch wood) and social security; but he also has a wife with health problems and the consumerist habits of the lower middle class, some debt, and would have nothing at all if his state and federal entitlements were to disappear.
In other words, my parents were pretty average. And I'm pretty average in my above-averageness: I know a little bit about managing money, not much, and I don't really understand tax laws, and I know just enough that, depending on my personality, I could either go with "thank god we've been lucky and let's do what we can to help those less fortunate than ourselves" or "hey, my husband's worked hard for everything we have and why are our taxes so high?!?" Which really, I suspect, is the basic difference between "liberals" and "conservatives" in America.
All of which is to say that I suspect the truth isn't that people like us--or those who make even more than us, like the asshole in the article--aren't, in fact, "really" rich. What I hope is that we realize what that means: that we have a lot more in common with our trailer-park neighbors (I really do live a few blocks from a trailer park) and the folks standing by the mall entrance with a cardboard sign saying "Anything Helps / God Bless"--and, for that matter, with the asshole investment bankers who made six-figure bonuses from the jobs they do to make a (comfortable, to be sure) living*--than we do with the invisible folks who actually *own* the banks and insurance companies, and who are the only ones that will "really" benefit from drowning the government so that it can no longer hand the rest of us life preservers when we need them.
*Obviously I have zero expertise in global finance or real wealth. But this is how it seems to me, and I *do* have some expertise in the whole land-vs-$ historical shift. Doubtless, however, there are actual historians reading who are cringing at my oversimplification.
**Again: NOT AN EXPERT ON THIS SHIT. I pay H&R block to do my taxes, because I don't get this crap. But it looks to me like, with a 0% tax rate on long-term capital gains, and a rate as low as 10% on short-term gains, based on which tax bracket you're in (and since tax brackets are based on income), if you didn't have a job but did have a good investment portfolio, you'd be an idiot to pay the 28% tax rate that Mr. B. and I and our peers who are effectively but not "really" rich pay.
***God yes there are real material differences between investment bankers and day laborers. But they're differences of degree, rather than of kind.
On the other hand, once you read the article, the ass in question has a point.
“I’m not a ‘trust-afarian.’ That, to me, is rich: People who aren’t producing something but have wealth. We go to work every day to get that income, so I think of myself as upper middle class.”The traditional meaning of a "gentleman" (or woman) was a person who did not have to work for money. I explained this to Pseudonymous Kid recently, and he found it very revealing, which it is: think about it the next time you criticize someone for acting "trashy."
But I digress. Among the many life lessons we oughta be taking from the Great Recession is that if your ability to feed, clothe, and yourself and/or your family--and your ability to see a doctor and get needed medical care--depends on your job, then your relative wealth is, in a real sense, not actual wealth. This is why back in the day, gentlemen who didn't have to work for a living freaked the fuck out about the shift from land-based to moveable wealth and encumbered their children for generations with expensive estates that forced them to start marrying the children of dirty merchants: because they knew, on some inchoate level, that the shift to a merchant-centered economy destroyed wealth as they knew it. It's also why the rich-as-shit live off income from investments, rather than spending their capital, invest broadly and internationally, and sure as shit spend $ on political donations and lobbying--because if your wealth depends on what is, when you boil it right down, a global fiction, you want it to be as "diversified" as possible, lest any one part of the fiction fall apart, *and* you want to make goddamn sure that the fiction continues to function.* (As, anger at banker bailouts notwithstanding, do we all; capitalism may piss you off, but it's nonetheless the water we all swim in, and if it dries up, we're all gonna be gasping.)
It's also why people like the asshole in the article and yours truly sometimes bitch and moan about tax rates. I don't ever bitch and moan about taxes--as a patriotic bleeding-heart-liberal with the instinctive risk-aversive conservatism of the first child, I'm completely down with the idea that you need revenue, goddamnit, in order to spend, and that spending to maintain important liberty-and-equality-fostering institutions like libraries and the ability to dial 911 in an emergency (warning: that link is to Free Republic. But it's worth it because the commenters are bitching about the very effects of their own anti-tax beliefs). But a lot of my socio-economic peers do, and they're not entirely wrong, because if your income comes from your job, then it's, well, taxable income--whereas people who are "really" rich (from this pov) may well be paying lower income taxes because a lot of their income is taxed at a much lower rate.**
Now, I'm sure as shit not a tax expert, and my parents were fully the kind of "stupid" people that conservatives (and plenty of liberals) just love to look down on: they lived hand-to-mouth, they had credit card debt they shouldn't have had, they didn't even teach their kids how to balance a checkbook. Mom has untreated mental health issues, hasn't worked in years, lives in poverty with her property-owning Freeper brother, cashed in her CA teachers' retirement and spent it all years ago, has credit card debt I don't even want to think about, and I'm not even kidding when I say that I hope she will die of some kind of smoking-related illness before she manages to run through the tiny inheritance she got from her father, whatever she inherits from her brother (which I guarantee you is what she's counting on supporting her once grandpa's tiny legacy runs out), and runs up against the limits of her ability to borrow. Dad's a little better off, because he is perfectly content to live on his CA state retirement (as long as it keeps coming, touch wood) and social security; but he also has a wife with health problems and the consumerist habits of the lower middle class, some debt, and would have nothing at all if his state and federal entitlements were to disappear.
In other words, my parents were pretty average. And I'm pretty average in my above-averageness: I know a little bit about managing money, not much, and I don't really understand tax laws, and I know just enough that, depending on my personality, I could either go with "thank god we've been lucky and let's do what we can to help those less fortunate than ourselves" or "hey, my husband's worked hard for everything we have and why are our taxes so high?!?" Which really, I suspect, is the basic difference between "liberals" and "conservatives" in America.
All of which is to say that I suspect the truth isn't that people like us--or those who make even more than us, like the asshole in the article--aren't, in fact, "really" rich. What I hope is that we realize what that means: that we have a lot more in common with our trailer-park neighbors (I really do live a few blocks from a trailer park) and the folks standing by the mall entrance with a cardboard sign saying "Anything Helps / God Bless"--and, for that matter, with the asshole investment bankers who made six-figure bonuses from the jobs they do to make a (comfortable, to be sure) living*--than we do with the invisible folks who actually *own* the banks and insurance companies, and who are the only ones that will "really" benefit from drowning the government so that it can no longer hand the rest of us life preservers when we need them.
*Obviously I have zero expertise in global finance or real wealth. But this is how it seems to me, and I *do* have some expertise in the whole land-vs-$ historical shift. Doubtless, however, there are actual historians reading who are cringing at my oversimplification.
**Again: NOT AN EXPERT ON THIS SHIT. I pay H&R block to do my taxes, because I don't get this crap. But it looks to me like, with a 0% tax rate on long-term capital gains, and a rate as low as 10% on short-term gains, based on which tax bracket you're in (and since tax brackets are based on income), if you didn't have a job but did have a good investment portfolio, you'd be an idiot to pay the 28% tax rate that Mr. B. and I and our peers who are effectively but not "really" rich pay.
***God yes there are real material differences between investment bankers and day laborers. But they're differences of degree, rather than of kind.
Labels: money, the economy
Posted at 12:30 PM
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