walkitout (walkitout) wrote,
walkitout
walkitout

who is rich?

I had a long conversation today with one of my brokers. It turns out we actually agree on some things that are believed to be wildly controversial (means testing on social security benefits, removing the income cap on contributions to social security), that heartens me about the possibility of making sure important safety net programs are preserved to be around for future generations.

But along the way, we went down a little rat hole about whether or not people making $250,000 a year can be considered rich. One of T.'s arguments was that people who make that amount of money, but who live in an expensive place -- like, say, New York -- can't be considered to be rich because their cost of living is so high.

Let's think about that with a little bit of readily accessible data.

I pulled this out of a note in a wikipedia entry about New York City, subhead Demographics.

http://www.fiscalpolicy.org/SamRoberts4Sep05.htm

That's someone's copy of a New York Times article from September 4, 2005, titled "In Manhattan, Poor Make 2 cents for Each Dollar to the Rich".

Here are the relevant bits of information:

"The lowest-income census tract in the city is a triangular patch of East Harlem east of First Avenue and north of East 119th Street, where, despite a hint of gentrification in a renovated brownstone or two, the neighborhood is dominated by the mammoth though generally well-tended public housing project called the Wagner Houses. The median household income there is $9,320, most of the residents are black or Hispanic and do not have high school degrees, 56 percent live below the poverty level and about one in 10 are foreign born."

and

"Manhattan's highest-income census tract is a six-square-block rectangle bounded by Fifth and Park Avenues and East 56th and 59th Streets. The median household income in this mostly commercial section of East Midtown is $188,697 (average family income is $875,267); none of the residents identified themselves as black; nearly one-third have advanced degrees and more than one in three are foreign born. Even there, though, the poverty rate is 16 percent."

I think that if you make substantially (honestly? Don't _you_ think that over $60,000 is substantially?) more than the median income in the _richest_ census tract in New York City (particularly since we may well be comparing apples to oranges, in that median income in these statistics may or may not be the same as AGI, which is what the $250K thing is all about), you might qualify as rich. Don't you?

Sure. _Average_ family income in that tract is much, much, much higher, because even in that richest census tract, there are a small number of families who have fantastically more money than the rest of the rich people. But that doesn't change things. If you've got -- call it 30% more money -- than half of the other families in the _richest census tract in NYC_, you are probably rich.

I am _so_ going to write that Memo to Rich People.
Tags: economics, taxation
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