But what use are the absolute figures, without an understanding of how wealth is distributed in the U.S.? A lawyer in NYC making $250k may not subjectively feel wealthy. Objectively speaking, however, the lawyer is in the top 2% of households in the nation. Compared to the rest of the 98% of the U.S., the lawyer is exerting far more economic power.

I agree that using percentiles is but one way to measure eliteness, and there are of course other ways. Net worth is arguably a better way of measuring economic power, although net worth is also highly concentrated in the U.S. (and no one is talking about taxing net worth). I would probably be just as happy with this measure.

What I object to, however, is subjective impressions of what is “elite,” based on an absolute number, because such impressions are very likely to be heavily influenced by our own economic positions, and likely ignore just how little most of the U.S. makes.

For an example of what I’m talking about, see, e.g., this post by David Bernstein over at the Volokh Conspiracy:

http://volokh.com/archives/archive_2009_02_22-2009_02_28.shtml#1235664195

Joe D.

(If you were implicitly arguing for a wealth tax, or some alternative to an income tax, that would be an interesting discussion, but I missed the implication.)

I think the figures are the issue, not the definition.

Elite means different things in different contexts, so one may speak of political elites, educational elites, military elites, etc. Often it designates a powerful class of persons within a given context, who govern, instruct or wage war, for example.

The issue I’m raising is what is the definition of a “moneyed-elite”? Sure, one approach is the one you take, simply counting the top 1, 2 or 10% measured by income. But I don’t see how that approach or definition is inevitable. It is possible to approach the question by also asking whether that cohort exerts significant economic power. That does not seem obvious. It is also possible to focus on net worth instead of income, of course.

I still don’t see how, objectively speaking, anyone can say that households with incomes in the top 10% ($100k+) or top 2% ($250k+) are not “elite.” Isn’t that the very definition?

Because then there would be nothing to tax!

* American Recovery and Reinvestment Act of 2009 (“ARRA”) (signed into law by President Obama on

Feb. 17, 2009), amending the Emergency Economic Stabilization Act of 2008.

According to the NYT’s David Cay Johnston, Hamill’s latest book “As Certain as Death” (Carolina Academic Press, 2007) “seeks to document how the 50 states, in contravention of her view of biblical injunctions, do more to burden the poor and relieve the rich than vice versa.”

more at

http://www.concurringopinions.com/archives/2007/12/the_heroism_of.html

Given that, it seems to me that focusing on absolute numbers makes little sense. Instead, we should focus on percentiles. In that light, it’s hard for me to see how the top 2% [$250k+] of households isn’t, by any objective standard, the “moneyed elite.”

I think many people are a bit startled by how low the $250k figure is for the top 2%. But I think people routinely underestimate how unevenly distributed income is in the U.S. The top 5% of U.S. households make more in aggregate income than the bottom 60%. The rich bear the heaviest tax burden because they earn most of the money. In fact, the government can raise a lot of money by simply taxing the top percentiles, because that is where all the income is.

The following site has a nice comparison of aggregate income versus aggregate tax burden. It shows that the federal tax burden is progressive, yes, but not too far off from the share of aggregate income that people earn.

http://www.cbo.gov/publications/collections/taxdistribution.cfm

Joe D.

P.S. A household earning more than $100,000 would be roughly in the top 10-15%. Still elite, I think.

All fair enough. Yes, people with incomes in the $100,000 to $120,000 are hurting too. They may be rich compared to people with incomes of $12,000 or $24,000 or $36,000. But people do not become millionaires on such salaries and it seems difficult to think of them as the “moneyed-elite.” The truth is, to afford what government has been doing and plans to do, a lot of people will have to pay a lot more in taxes, not only millionaires.

I’m also wondering: is $250,000 a middle class salary? Dan Gross doesn’t think so:

“Only 2.245 million U.S. households, the top 1.9 percent, had income greater than $250,000 in 2007. (About 20 percent of households make more than $100,000.)”

“Even in wealthy states, $250,000 ain’t bad—it’s nearly four times the median income in wealthy states like Maryland and Connecticut. And even if you look at the wealthiest metropolitan areas—Washington, D.C. ($83,200); San Francisco ($73,851); Boston ($68,142); and New York ($61,554)—$250,000 a year dwarfs the median income.”

at

http://www.slate.com/id/2198806/

Even if one feels that the 100-250K earners are stretched or deserve relief, it’s hard to blame the Obama administration for not helping them much, or even spreading pain to them. If there’s any tax increase at the top, the Limbaugh-right will bill it as a general tax increase. They’ve made their bed, and now they’ll lie in it.

As the tax base gets narrower, rates get higher. At some point the Laffer curve becomes real. (I’m not suggesting we’re anywhere near that, or that Obama’s tax increase will come close. But I don’t think anyone can replace Obama’s proposal with a tax on incomes over, say, $500k without seriously considering the whether the curve will come into play.)