How rich is rich?

There’s a nice little article in the Washington Post about who counts as rich, which is an important question given the tax priorities that the Bush administration set with regard to the inheritance tax and other tax cuts for Americans. A couple of salary figures are sticking points: $97,500 is the cut-off for the payroll tax, and many candidates are in favor of taxing payrolls above that figure, although they often suggest that there should be a ‘donut’ exemption for the salaries between 97,500 and 250,000. This is basically the newly discovered ‘upper middle class’ or else what you might call the working upper class. Because families in this range still worry about money, they don’t associate themselves with the luxuriant rich who can live off the interest from their wealth. This notion of “financial stress” seems to be another cutoff, so Edward Wolff suggests: “you need not only an income upwards of $350,000 a year — which happens to be right about the point where today’s top marginal income tax rate of 35 percent kicks in — you also need at least $10 million in accumulated wealth.”

Seriously? Clinton is backing an inheritance tax that starts at $7 million dollars, saying that we Americans think people should have to ‘work for what you get.’ Except the first $7 million: that you get for free. Don’t get me wrong: I’m not a communist. But given the record deficits we’re facing, I think maybe we could go back to the old $1 million tax-free limit without really hurting anybody. If they want to be ‘truly wealthy,’ let them earn the last $9 million themselves.

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