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> The middle class is getting absolutely hammered by taxes while the rich just keep on keeping on in a tax-free world not experienced by others. Define middle

> The middle class is getting absolutely hammered by taxes while the rich just keep on keeping on in a tax-free world not experienced by others. Define middle class. If you make >$250k but <$2M - you're probably getting hammered. But I don't think many people consider that "middle class". The ones with the highest tax rates by far make around $400-$600k. You don't have enough income for it to make sense to spend a lot of money to avoid taxes (accountants, tax lawyers, shielding income through corporations, etc) - and most of your income is "earned" from an employer - so you don't have many strategies to avoid taxes realistically anyway. You're pretty much stuck with a relatively high tax rate. But this is the top 1% - that doesn't seem middle class to me. If you make ~$100k - you're still in the top 15% - but your tax rate is really not THAT high. Middle class should probably center on FAMILIES earning between ~$40k and ~$100k. By no means are these FAMILIES being hammered with taxes - on the low end, you're looking at hardly any federal or state tax beside payroll (your pension).

c22 5y ago
40k is a full time minimum wage job where I live. Does the middle class really consist of just everyone who is fully employed?
- onlyrealcuzzo 5y ago
  Minimum wage is ~$15k nationally. Also - IIUC - West Hollywood, CA voted for the highest minimum wage in the country, and it's lower than $40k. Where is minimum wage $40k?? Anyway - there's a lot of minimum wage workers who make below $40k - probably the majority make less than half that - many minimum wage workers do not work full-time. And, yes, considering how many single-parent HHs there are, and how many HHs with only 1 person on a small SS check - two working adults making minimum wage would be considered close to low end for middle class. Median HH income is $67k - meaning only 50% of HH make more than that. So the bar for middle class is obviously going to be lower than that. It's subjective - maybe your bar is at $50k? The tax rate is still quite low at that point (~14% with ~7% of that being your pension - SS & Medicare - even lower if this is a family instead of a single person - which, statistically, is likely). If this is considered hammered - I don't know how low people expect taxes should be, yet we still have a functioning society. And, regardless, you're getting significantly more hammered the more income you make until you're deep into the 1% and can afford to avoid taxes. The top 10% are not skimping out on taxes. People making >$5M are.
  - c22 5y ago
    I don't know that I've ever thought about my bar, but when I was a kid my dad was making around 80-90k and we considered ourselves low-solid middle class. But that was 30-40 years ago, my understanding is that real wages have not kept up with inflation so I'd expect the bars on middle class to be higher today. Of course we also had the idea that "middle class" was more of an aspirational lifestyle goal and not a moving target. I guess if we just define it accurately as the median of real incomes we can see this range drop alarmingly. Thanks for the perspective.
    - falcolas 5y ago
      So, a few reference points. In 1980: the median household income was $17.7k. The median income for one individual was $12k. $80k in 1980 is roughly equivalent to $240,000 in 2020. That was top-end middle class, absolute minimum. https://www2.census.gov/library/publications/1982/demographics/p60-132.pdf https://www2.census.gov/library/publications/1982/demographi...
      - onlyrealcuzzo 5y ago
        That would've been top 4% in income then.
      - ryandrake 5y ago
        $240,000 in Bay Area California is immensely different than $240,000 in the hills of West Virginia. Middle class is more of a lifestyle than a particular income number. It is entirely possible that middle class in a particular city includes people whose incomes are in the top 5% nationally, but still live barely comfortably because their high cost-of-living area. I'd argue median income is irrelevant when it comes to assessing whether or not someone is living a middle class lifestyle.
        onlyrealcuzzo 5y ago
        This has some merit currently - but far less so in the past. NYC and The Bay area have always been expensive. But the difference 40-years ago was nowhere near as drastic as it is today.
- falcolas 5y ago
  The federal minimum wage is $7.25 an hour. 40 hours for 50 weeks makes for $14,500 annually (before taxes). Around 21 states use this value as their minimum wage. The largest state minimum wage can be found in New York and Washington, DC, at $15. That is $30,000 annually.

c22 5y ago

40k is a full time minimum wage job where I live. Does the middle class really consist of just everyone who is fully employed?

onlyrealcuzzo 5y ago
Minimum wage is ~$15k nationally. Also - IIUC - West Hollywood, CA voted for the highest minimum wage in the country, and it's lower than $40k. Where is minimum wage $40k?? Anyway - there's a lot of minimum wage workers who make below $40k - probably the majority make less than half that - many minimum wage workers do not work full-time. And, yes, considering how many single-parent HHs there are, and how many HHs with only 1 person on a small SS check - two working adults making minimum wage would be considered close to low end for middle class. Median HH income is $67k - meaning only 50% of HH make more than that. So the bar for middle class is obviously going to be lower than that. It's subjective - maybe your bar is at $50k? The tax rate is still quite low at that point (~14% with ~7% of that being your pension - SS & Medicare - even lower if this is a family instead of a single person - which, statistically, is likely). If this is considered hammered - I don't know how low people expect taxes should be, yet we still have a functioning society. And, regardless, you're getting significantly more hammered the more income you make until you're deep into the 1% and can afford to avoid taxes. The top 10% are not skimping out on taxes. People making >$5M are.
- c22 5y ago
  I don't know that I've ever thought about my bar, but when I was a kid my dad was making around 80-90k and we considered ourselves low-solid middle class. But that was 30-40 years ago, my understanding is that real wages have not kept up with inflation so I'd expect the bars on middle class to be higher today. Of course we also had the idea that "middle class" was more of an aspirational lifestyle goal and not a moving target. I guess if we just define it accurately as the median of real incomes we can see this range drop alarmingly. Thanks for the perspective.
  - falcolas 5y ago
    So, a few reference points. In 1980: the median household income was $17.7k. The median income for one individual was $12k. $80k in 1980 is roughly equivalent to $240,000 in 2020. That was top-end middle class, absolute minimum. https://www2.census.gov/library/publications/1982/demographics/p60-132.pdf https://www2.census.gov/library/publications/1982/demographi...
    - onlyrealcuzzo 5y ago
      That would've been top 4% in income then.
    - ryandrake 5y ago
      $240,000 in Bay Area California is immensely different than $240,000 in the hills of West Virginia. Middle class is more of a lifestyle than a particular income number. It is entirely possible that middle class in a particular city includes people whose incomes are in the top 5% nationally, but still live barely comfortably because their high cost-of-living area. I'd argue median income is irrelevant when it comes to assessing whether or not someone is living a middle class lifestyle.
      - onlyrealcuzzo 5y ago
        This has some merit currently - but far less so in the past. NYC and The Bay area have always been expensive. But the difference 40-years ago was nowhere near as drastic as it is today.
falcolas 5y ago
The federal minimum wage is $7.25 an hour. 40 hours for 50 weeks makes for $14,500 annually (before taxes). Around 21 states use this value as their minimum wage. The largest state minimum wage can be found in New York and Washington, DC, at $15. That is $30,000 annually.