Newsflash: You Are Not Poor

by folkbum

I mean, I don't think this ought to be much of a surprise, but I think it will be to some. I seriously think that often in the world of blogging, we forget that we do not actually live in the real world. What's important to us is not necessarily important to most people, for example. What we get most exercised about is stuff that a lot of people would consider dumb. We think out opinions matter. And so on.

The topic of the potential economic stimulus package that Congress and the president are pushing to try to save us from a recession has raised a side issue that I've noticed previously. Most proximally, it was Chris (yes, that same guy) complaining about the proposed give-backs here (spelling and punctuation intact):

What rebate once again they means tested the rebate so my family will not receive it.

I am sure that people who don't actually pay taxes will some how get this rebate but we wont.

Wealth redistribution is all this is plain and simple

I recognize that Chris is primarily complaining about income redistribution, but the fact is that his complaint sounds, to my plebian ears, more like whining. Two things to note:

1. The proposed stimulus package starts phasing out "rebates" to people at the $75,000 level for individuals and $150,000 for married couples. That his household isn't eligible for the "rebate" suggests an income level over $150,000*.
   
2. The total number of households in this country earning $150,000 or more is less than 6%.

As I noted in the comments there, it's hard to feel sorry for someone in the top 6% of households. Even moreso, it's hard to see how a $1200 check from the feds (or said check's absence) is going to significantly change his family's purchasing power. If a family earns $44,389 (the national median), then maybe $1200 would be a big deal. For Chris and family--while it would certainly be welcome, I am sure--it would be a drop in the proverbial bucket.

But it reminded me of several other threads I've seen recently around the Cheddarsphere, of people who just seemed flabbergasted that not everyone in the country earns as much money as they do. Here are two examples from the grandpappy of conservative Wisconsin blogs, Boots and Sabers.

1. In a post about the "fix" to the Alternative Minimum Tax that went through last December, a commenter calling himself TD was very defensive about being labeled upper-middle class. Apparently, he was in danger of being socked by the AMT, and our good friend Scott Feldstein had pointed out in the thread that "the AMT was going to hit upper-middle class Americans." TD's own perception of his personal economy was such that he couldn't possibly be upper-middle class. And yet, the vast majority of households who would have to pay the AMT fall into the top 20% of households in income. I'm not sure where one draws the line for upper-middle class, but I would have to believe that the top fifth of households would be included there.
   
2. There was a thread earlier this month in which Owen complained (while ignoring the real substance of the study that he posted about) that researchers labeled two groups in their study "wealthy" and "poor." The dividing line was set at, it seems, $37,000 for a family of four. That's nearly twice the federal poverty level, but, as we know from above, not much below the median household income of $44,000. Owen's beef was, it seems, with the semantics. But he wasn't complaining that a household at almost twice the FPL was still called "poor"; no, it was that people just below, at, and just above the median were suddenly "wealthy." But here's the newsflash again: People in the middle fifth of income in this country (about $35,000 to about $55,000) are not exactly poor.

Perhaps when you live someplace like West Bend, as Owen does, your perceptions of normal can get distorted. In the WB (see data here and
here), the median household income is about $55,000--at the dividing line between what nationally is the middle and the fourth quintile of income. It is, in fact, more $20,000 over the median income of my current zip code in the City of Milwaukee. It is more than $30,000 higher than the median income of the zip code we lived in before we bought this house. The number of people living below the federal poverty line in my old zip code is nine times that of West Bend. And my old zip code was not the worst in the city: One zip code over, and the median household income falls down to the poverty level. In West Bend, more than 60% of households earn more than $60,000 annually; in 53206, less than 15% of households do. That's still not the worst zip code in the city.

I'm not sure where, exactly, Chris lives. He is welcome to plug in his own zip code to the ZipSkinny website and see what he gets.

You should probably do your own, as well, and start thinking about how well you do relative to 53206, or to the FPL. It may open your eyes just a little bit.

* Chris has posted about his being a stay-at-home dad; it's possible that if he earns no income at all and paid no payroll taxes, then his family's income could be as little as $75,000 per year to meet his description of having earned too much to qualify for the "rebate." Even so, that places his income in the top %25 of US households. He wasn't clear on that point so, like a good blogger, I worked with assumed data that makes my point better. :) It should also be noted that the "rebate" is "phased out" at the higher incomes, so his family may still get a check, albeit a smaller one.