Who Are the 'Rich'?

Definitions vary widely, depending on who is talking

Hardly a day goes by without some politician in Washington voicing the "for the rich" phrase in connection with taxes, the budget, or means-testing. As the November elections get closer, expect the "for the rich" line to swell in frequency. Repeated and repeated, it will appear to be something tantamount to a nasty habit.

But how rich is rich? At what dollar figure is someone rich? Can politicians, many wealthy themselves, define it?

My trusty Webster's New World Dictionary describes rich as "having more than enough of material possessions; owning much money or property." That gets us nowhere, since it triggers the parallel question: How much is much?

In efforts to cut through the confusion, I figured the most direct way to get a handle on the "for the rich" term was to contact 20 key and usually highly vocal congressional leaders, equally divided between Democrats and Republicans. The result: No response. Zilch. Even House minority leader Richard Gephardt (D) of Missouri - usually not shy in repeating the "for the rich" line - was mum.

So, I turned to other sources, including previously published and broadcast figures on the subject. As a benchmark, the Census Bureau last October pegged median household income for 1994 at $32,264, up slightly from an inflation-adjusted $31,241 the year before, but below the 1989 peak of $34,445. More recently, a mid-June Census Bureau report placed average income in the top 5 percent of households at $183,044. At the same time, it pegged the average income of the top 20 percent at $105,945.

An analysis by Congress's Joint Committee on Taxation, in connection with tax-cut proposals, showed that 70 percent of benefits would go to taxpayers making less than $75,000 a year. That same $75,000 threshold popped up elsewhere.

Mr. Gephardt, in an early tax plan he advanced, indicated $75,000 as the high end for middle-class income. But his figures are fluid. Appearing on a Sunday talk show earlier this year, he revised his definition of wealthy, putting it at $300,000 to $500,000 a year.

House Budget Committee Chairman John Kasich (R) of Ohio also pointed to $75,000 as the crossover point in suggestions that Medicare recipients pay higher premiums.

In last fall's budget discussions, the Senate Finance Committee lowered to $75,000 from $200,000 the annual income cap for single parents ($110,000 for couples) to claim the full proposed child-tax credit. President Bill Clinton also used $75,000 as top household income for the child credit.

On Sunday talk shows, White House Chief of Staff Leon Panetta has pinpointed $200,000 when discussing a level that brings "tax breaks for the rich." What might be considered the official definition of "rich" comes from the Internal Revenue Service. Under current tax law, the IRS applies the top tax rate to single persons and married couples with taxable income of $256,500 and up.

"Rich" can also vary around the country, notes a San Francisco economist. In some middle parts of the United States, he points out, "$100,000 goes a lot further and might qualify some people as being within upper-income groups."

Observes a tax practitioner: "Some folks may feel rich at $1 million; others might feel poor at $5 million. 'Rich' is somebody who has more money than you or me."

*Hal Morris is a business writer based in Las Vegas.

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