Ship of Fools: How Rich is Rich?

Thread: How Rich is Rich? Board: Oblivion / Ship of Fools.

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Posted by The Midge (# 2398) on :

It is party conference season. So we can expect lots of scapegoating of people on benefits, bankers, immigrants, corporate fat cats, and who ever else particular political ideologies want to blame for the current economic woes. This one caught my eye Labour: £60,000 earners 'not rich' and not tax target.

£60K a year not rich? Maybe not if you have to divide it up among a family of five and care for granny too. I'm on benefits, working part time for a minimum wage and could look upon those earning £60K as being rich. I might be justified. Then again I have plenty of food, a roof over my head access to a car and enough money to keep up the payments next month (thought this is partly down to luck rather than revenue). Someone in a war torn nation in Africa may rightly be envious of me.

But what is rich? Where should we start expecting people to put their hands in their pockets to pay extra taxes and start contributing to solving world issues? In other words when does the story of Jesus' encounter with the rich young man apply to us?

Posted by Anglican't (# 15292) on :

From memory, MPs earn around £60,000 (I think it might be 65k). So I'm not surprised to hear them say that someone on this salary isn't rich.

Posted by Herrick (# 15226) on :

Good question but only relative. When I've travelled in SE Asia I've been looked upon as rich as I could afford a plane ticket and stayed in (cheap) hotels. My spending money was would have been the envy of hordes of people, if they bothered with envy. I'm not rich, just fortunate.

At home I am on a low income but have food, shelter, medical care, transport, sewerage, free schools and a sense of public safety and security. Not rich but blessed [Yipee]

Here I would consider a single person on AUD$100,000 (a rough equivalent) to be very well off.

Posted by Arethosemyfeet (# 17047) on :

I suspect, in all honesty, that 60k in London doesn't feel particularly rich. Up here there are perhaps 2 people on the island who receive that kind of salary (the doctors). I think in a particular area, once you're earning twice the median income I would perceive you to be rich. If I wasn't dealing with the legacy of a debt problem I think I'd consider myself pretty well off, and I earn slightly more than half that figure. This highlights part of the problem though - if you own your house outright or have very low rent or mortgage payments, then 20-25k can seem a very comfortable sum. On the other hand, if you're trying to afford rent on a 2 bed flat in London then 30-40k starts to look like money you can just scrape by with. The elephant in the room here is housing costs.

Posted by Enoch (# 14322) on :

quote:
Originally posted by The Midge:
... Where should we start expecting people to put their hands in their pockets to pay extra taxes and start contributing to solving world issues? In other words when does the story of Jesus' encounter with the rich young man apply to us?

There's a second difference here, that both left and right skate over. Jesus didn't tell the rich young men to give his money to the state. He told him to give it to the poor.

Some people believe that there's an automatic and logical connection between paying more taxes and making the world better. Quite a lot of people just don't see that the one follows from the other, some as a matter of philosophical logic and others because they don't see much evidence that demonstrates it.

Posted by Sighthound (# 15185) on :

It occurs to me that if everyone was given a free house, salaries could be a lot lower. With no mortgage 25k would be quite a handsome income, while 60k would deliver unbounded luxury.

I suppose 'rich' means someone with more money than the person making the comparison. If I were on 100k, I'd probably persuade myself I was just scraping by and paying far too much tax. Whereas those gits on £250k...

Posted by Boogie (# 13538) on :

We have had a combined income of well over 100K in the past (no mortgage) but didn't feel rich!

I don't think you ever do. You live to what you have. Now we have the occasional month when there's nothing left at the end of it. But we are rich, most certainly.

Of course, virtually everyone in the UK is rich. Most of us have clean water, more than adequate food and shelter.

Posted by Ophicleide16 (# 16344) on :

I suppose in economic terms, there has to be some sense of relativity. I'm richer than him but you're richer than me etc So yes it's difficult to put an actual figure on it- but there does need to be a sense of significantly greater wealth than average.

Interesting to think about the different ways we use the word rich, just as an aside.

Posted by The Midge (# 2398) on :

I am in the middle of one of my occasional attempts to do some budgeting and book keeping. Somehow the figures seem to be balancing!

Our income is well down on a couple of years ago. I suppose we have learned to do without a lot of 'essentials' that came as a result of the stress and effort it took to hold down a higher income job. It really is a case of:

quote:
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

To quote Charles Dickens' Mr Micawber from David Copperfield.

The trouble with tax and benefits systems is they have to deal with averages or get labyrinthine when they have to deal with all the variables such as property prices.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Ophicleide16:
I suppose in economic terms, there has to be some sense of relativity. I'm richer than him but you're richer than me etc So yes it's difficult to put an actual figure on it- but there does need to be a sense of significantly greater wealth than average.

Interesting to think about the different ways we use the word rich, just as an aside.

Part of the problem is that those comparisons seem to almost always work up the ladder, not down. People will say, "I'm not rich-- look at Bill Gates/ Donald Trump/ whoever". You almost never hear, "yes, I'm rich-- look at that homeless guy there." Shane Clairborne suggests that the problem for evangelical Christians is not that they don't care about the poor, but that they don't know any poor. t would be interesting to see how much our perspective, gratitude, etc. would change if we spent more time just hanging out with the poor.

Posted by Polly (# 1107) on :

The point about relativity only goes so far.

Many people have a lifestyle that is 10% above their means. If we are fortunate to have a mortgage then we quite often have one that is at the very top end of our financial capabilities regardless of whether we earn 25K or 65K a year.

But the price of bread stays the same but the difference is that those who are on £65K don't buy from Lidl or Sainsbury's basic range whereas those living on below the national average see they don't have the choice of shopping in M&S as a viable option.

Posted by lilBuddha (# 14333) on :

cliffdweller,

You are more generous in your view than I. It is not my experience that knowing poor people changes much. IME, people are generous to the people they know, but do not change their attitudes towards the group in general.

----------
How rich is rich? There are the obvious über wealthy, but for most it is a little less obvious to themselves. People tend to spend to their means. 30K, 60K, 100K per year, all are in the same position. Home, vehicle(s), food. The difference is the age, size and quality, not as much about excess.
Now, obviously, there is a difference, a massive one. But the
perception to many in the higher bracket is they've naught much at the end after paying bills, taxes and such. So they do not feel wealthy.

Posted by moonlitdoor (# 11707) on :

There are those who don't spend to their means, of whom I am one. I have a reasonable income but a lot less than the figure quoted in the opening post. But I have always lived well within it. I am typing this on a 1999 compaq deskpro, for example. I could afford to buy a new computer but this one still works ok. My car is from 1994 but it can drive to the same places that a newer one would.

As a result I have some savings and feel rich in the sense that I know if I need to spend money on something I can do so.

I don't know if it makes me feel more generous to the poor or not. I give some money to projects in Africa but I don't myself know anyone who lives in that sort of poverty. I know people who can only afford an old computer, but my empathy for them is limited by the fact that I don't see the same utility in a newer one that they do. People with more expensive stuff might actually understand their situation better.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by lilBuddha:
cliffdweller,

You are more generous in your view than I. It is not my experience that knowing poor people changes much. IME, people are generous to the people they know, but do not change their attitudes towards the group in general.

Honestly, in my experience (25+ years working with suburban evangelical congregations) it really does make a difference. It takes time, yes. At first when people get to know the poor, they'll think of their friend Bob the homeless guy as the exception to whatever their prior preconceived notions of the poor might have been. But before too long, they know far too many "Bobs" to continue that notion and it does sink in. I especially found that to be the case this summer when we hosted a summer camp for homeless kids in our neighborhood.

But my point above was really a smaller point than that. I was talking about what makes people more generous. I was talking about the OP-- what makes a person more likely to think of themselves as "rich". My point was that our default seems to be to compare ourselves always "up the ladder" to people who are wealthier than we are, by which relative standard, no matter how much we have we never seem wealthy. But when we compare ourselves down the ladder-- e.g. by spending more time with the poor-- we are more likely to think of ourselves as "rich". I've found that to be pretty much true, even of people who are living paycheck to paycheck. Heck, some of the very poor (by my estimation) that we're serving at the shelter/food bank will hasten to tell me they'er "not that bad off" because they (more than their wealthy suburban patrons) know so many people who are even worse off.

Posted by no prophet (# 15560) on :

Expenses and cost of living must be factored in. In remote areas of Canada, a house might cost $15,000, which the same one must cost 25 times that in a city. The remote location might have a litre of milk costing $7 however, which the city location might have this at under $1. Weirdly with our controlled liquor prices, the cost of bottle or case will be the same everywhere.

Rich I think, is perceptual. If someone is rich, they buy things without regard to the price. They want it, they buy it.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by moonlitdoor:
There are those who don't spend to their means, of whom I am one. I have a reasonable income but a lot less than the figure quoted in the opening post. But I have always lived well within it. I am typing this on a 1999 compaq deskpro, for example. I could afford to buy a new computer but this one still works ok. My car is from 1994 but it can drive to the same places that a newer one would.

"People tend," I posted, not all people do.

quote:
Originally posted by moonlitdoor:

As a result I have some savings and feel rich in the sense that I know if I need to spend money on something I can do so.

I don't know if it makes me feel more generous to the poor or not. I give some money to projects in Africa but I don't myself know anyone who lives in that sort of poverty. I know people who can only afford an old computer, but my empathy for them is limited by the fact that I don't see the same utility in a newer one that they do. People with more expensive stuff might actually understand their situation better.

That you husband your resources is good. That you have resources to husband is fortunate.
Your empathy is truly limited because they want more than they have? That they do not appreciate being poor?
There is a marked difference between doing without by choice and doing without by circumstance.

Posted by moonlitdoor (# 11707) on :

I have obviously not worded this very well as I was describing a limitation in myself, and you have interpreted it as me criticising others.

I know that a lot of people do spend up to their income like you said. The idea had been expressed that because this means even people with higher incomes don't feel rich, they may not feel generosity to the poor. I was just pointing out that those who don't spend up to their income and who do feel rich, may not be any better.

I'm thinking of relative poverty, where a person feels poor because they can't afford the stuff everyone else seems to have. Richer people who do spend up to their income can understand that better than I can, because they also have wants that they can't fulfil. Wanting but not being able to afford a smartphone probably feels the same as wanting but not being able to afford a Mercedes. I don't care whether I have the same stuff as other people or not, so it's hard for me to put myself in their shoes. That's what I mean by lack of empathy, that I don't know what their situation feels like.

Posted by lilBuddha (# 14333) on :

Apologies for the misinterpretation, moonlitdoor.

Posted by Anyuta (# 14692) on :

obviously not only is it all relative, but also not a bright line, but a spectrum. I know that I am rich by many standards. However, as someone else described it, I live up to (and sometimes beyond) my income. so even though my salary would probably be considered high in many places in the US (never-mind the third world), I definitely don't feel rich. ONe reason is that my family lives off of MY income. but the standard that I tend to measure agains (i.e. my friends and co-workers) tend to have two salaries of similar size. so I'm living off of pretty close to half what they live off of, but mentally that's whose standard I compare myself to (not consciously, but we all subconsciously measure how we are doing based on those around us).

I'm getting to the age when I can see retirement off in the distance. it's not imminent, but it's close enough to start tinking about/plannig for. although I know that in reality I'm unlikely to move from this area for quite a while if ever, I indulge myself in pretending that we might move somewhere exotic. and one of the places I've been concentrating my fantasy efforts on is Guatemala. lots of reasons, but certainly one is that my husband and I can live EXTREMELY well on my retirement income there, whereas here I would have to really make some major changes to my lifestyle. by Guatemalan standards I live in a mansion, and am obscenely rich. by the standards of my peers I live modestly in a dump of a house a long, long commute away from work.

but the OP was asking at what point is rich really rich enough to warrant paying "extra" in taxes. Clearly this limits the "pool" of people to compare, since we're not talking about the standard of wealth of a third world country, but the standard in our own country (in my case the US). I think that the point at which someone is truly "rich" for this purpose is pretty high, and of course the "extra" they pay would only be on the bit above that income point. I cant come up with an exact figure, but I'd say it would allow for a standard of living where a family can live without NEEDING anyone employed, have a quite large house, nice cars.. new ones every couple of years, a nice vacation every year, college for the kids without taking out a loan... this is not the beginning of "rich", but this is where I think it's definitely reasonable to say "hey, you have it really, really good.. you should probably give back a bit more to the society that made this possible for you".

I also think that this would certainly include those who are rich enough to live off of the money which their money makes (i.e. interest/investment income), rather than salary. that income should be taxed as the same rate as salary income. it makes sense to me that those who have enough wealth that IT is making even more wealth should not get a tax benefit for it.

but.. I also don't have a problem with paying more tax, on a percentage basis, than someone who is living off half my income. Not that I love paying taxes, but it seems reasonable for me to do so to help those who have not had the luck in life that I have.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by Enoch:
There's a second difference here, that both left and right skate over. Jesus didn't tell the rich young men to give his money to the state. He told him to give it to the poor.

Not so straight forward. One, taxes go to help the poor. And two, even should private donation take up the slack in direct charity, taxes pay for infrastructure we all use. Who shall pave the road or lay the sewer pipes, if not for taxes?

Posted by orfeo (# 13878) on :

This has distinct echoes of when it was said here in Australia that a family on an income of $250,000 a year would be 'struggling'.

This article was one I found interesting at the time, because Greg Jericho is always very good at sourcing facts and figures.

And I think he hits the key point, which has also been raised on this thread: you can be 'struggling' at any level of income depending on what kind of lifestyle you set for yourself. There are families 'struggling' to put their kids through private school and still afford the annual overseas trip.

Posted by Gramps49 (# 16378) on :

Going to the comment about Jesus telling the rich young man to sell everything he had and give it to the poor. What did the young man do? He went away very sad because he was so (damned) rich.

If we expect the upper 1% to freely give to the poor, we will be sadly disappointed. While there are a number of exceptions, it seems the rich tend to hoard more than the bottom 99% When the 1% see a increase in wealth of over 60% in the last two decades while the rest of the population has stayed pretty stagnant, something is wrong with this picture.

Taxes are there to help redistribute the wealth. Over the past 20 years we have been sold a bill of goods. Trickle down has never worked and will never work. As it is now, there is a redistribution of wealth upward.

Take a look at the 50's and into the 60's, a period of solid economic expansion, when the 1% were paying up to 90% of their income in taxes. It forced companies to pay more to the worker and workers rolled their money over and over, creating more wealth in the middle and lower classes.

Remember the cartoon character of Donald Duck and his family? They had an Uncle, Scrooge. What was Scrooge known for? His big vault where he stashed all his coins. This, in essence, is what we have now. Want to know why gold is sky high? It is not because some young couples are buying gold. Want to know why oil is in the stratosphere? Someone has too much money to speculate? While the American Stock Market has practically doubled in the past eight years, it is not because the middle class has suddenly found money to play with.

Let's use the power of the government to break open those vaults and make sure the money goes to those who deserve it the most, the lower and middle class. They are the ones who do the work. They should be paid a live-able wage for it.

Posted by Palimpsest (# 16772) on :

In the US, I believe a family was estimated to be able to happily meet most needs on $75,000. However, it turns out that happiness past this is a function of relativity. If you make $150K and everyone around you makes $200K then you're likely to be less content.

In addition, several key budget areas are soaring out of control; housing costs in popular demographics, health care costs including end of life care; pensions and educating the next generation are all becoming priced out of reach of most of the middle class. The general sentiment in New York about 3 terms of Mayor Bloomberg is that the city has become unaffordable for many formerly middle class residents.

This is made worse by the fact that taxes on the extremely rich and corporations have been greatly reduced for the last 50 years while government expenditures, especially military cost and propping up the financial services sector, have exploded.

There are very few advocates left in the political arena for taxing the rich for equalization. It could happen, but only after the traditional middle class dream of an commonly attained good life have been crushed.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Palimpsest:
In the US, I believe a family was estimated to be able to happily meet most needs on $75,000.

That depends on how you define "needs", surely?

What does a human being actually need? Shelter, obviously - but that need can be met by a single-room apartment on the 23rd floor of a concrete tower. Millions of families, right now, live in single-room accommodation perfectly happily. Clearly we do not need spare rooms, much less whole houses to ourselves. Also, a single room can be kept warm by a single fire in the corner - which can also be used for cooking and heating water!

Yes, food and water are obvious needs as well. The minimum nutritional requirements of the human body are well known, and can probably be met by a steady diet of rice and lentils with a few other items thrown in. Don't like rice and lentils? Tough - flavour or enjoyment are not nutritional requirements and cannot therefore be said to be needs. As for water, while access to it for drinking and bathing is a need, I can't see how going to the expense of having it pumped directly into our homes can be justified. Plenty of people the world over would consider a well or pump in the middle of their town to be incredible wealth, so why should we expect to get more as a right? And don't even get me started on our ludicrously opulent and wasteful habit of literally shitting into bowls of perfectly potable water on a daily basis...

Of course, since water is the only drink humans need, every other drink be it cola or champagne is unnecessary.

On with the needs. Clothing is a requirement, especially in colder climes. But do we need to have more than one set of clothes? I think not - any spare clothing or shoes, especially if they're 'nice' or 'for special occasions', is a luxury rather than a need.

The ability to keep ourselves and our homes/clothes clean is, I would say, a need. But do we need showers, washing machines and dishwashers? Surely a single tin bath can meet the need perfectly adequately, and as well as humans both dishes and clothes (of which we only need one set, remember) can be washed in it as well.

Regular exercise may be needed to keep us fit. Fortunately, the walk to get water and the climb up 23 flights of stairs (elevators are such a luxury) to our tower block apartments will more than meet that need without us having to splash out on luxuries like gym membership.

I reckon that's about all we need. Everything else - TV, computers, transport (other than walking) is a luxury, and therefore anyone who is able to buy anything else should be considered rich and taxed accordingly. Right?

I'm guessing this will be the part where someone comes in and says "oh, but you have to consider the culture someone lives in when considering their needs, so in the Western World a TV (etc.) is essential". But if that's an acceptable argument, then surely it's also an acceptable argument for someone whose culture sees membership of the local Country Club or ownership of the latest BMW to be essential?

And if anyone is tempted to start down the "but Country Clubs and BMWs are clearly not essential human needs" route, consider how someone from the Democratic Republic of Congo would view the "a TV is an essential human need" claim. As far as they're concerned, everyone in the Western World is ridiculously rich.

How rich is rich? By the only objective standard, simply being in the Western World makes you rich. By subjective standards, virtually nobody is. Of course, by hypocritical standards everyone who has more than me is...

Posted by Firenze (# 619) on :

Up to a point, Lord Copper. You are using 'need' as in 'need not to die of hunger, thirst exposure etc.' But - since we're living 23 floors up in this tower block, we're clearly not in a situation where we can either forage or grow the food we need. So we need to be part of an exchange economy where we can trade something we have for either food or money. Not easy finding a job when you're illiterate, unskilled and niffing a bit (it's been cold, so you've not been able to wash your single set of clothes in your bucket of water. Not that you have a bucket).

Clearly, any society above the level of cave-dwelling hunter-gatherer requires infrastructure, specialisms and exchanges which in turn gives rise to superfluities and before you know it you have inequalities and then laws and bingo civilisation is on the road.

So I would say 'need' equate to at least 'able to maintain yourself in the society you find yourself in' - and I think most people would add 'and prosper'. And it's the prospering which is the crunch: should the whole society prosper equally, or should my prosperity be based on you definitely not prospering?

Posted by The Midge (# 2398) on :

@Marvin
We may not need good food and things that we enjoy. I have to ask why God bothered with them. I can't imagine a utilitarian world of iron rations and living alone in soulless hovels. It would be too depressing. We need beauty, a drink with good company, a fun day out and a Christmas party. A marriage which lacks these is going to be in trouble as is a society which excludes the possibility of some kind of enjoyment.

Jesus said that the poor will always be with us after being treated to footbath of hugely expensive perfume from a high class hooker (maybe she charged thousands for her affections).

I think there is a challenge to us, that a certain level of extravagance are essential to the well being of the soul. Celebration and feasting is an essential part of the spiritual life. Otherwise we would go nuts.

The poor are always with us because poverty is about inequitable distribution of wealth (not just income but what we hold onto and maybe hardly use). Perhaps we should grow veg on our unkempt garden and throw a harvest feast with the produce just because we can.

Posted by Belle Ringer (# 13379) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Palimpsest:
In the US, I believe a family was estimated to be able to happily meet most needs on $75,000.
What does a human being actually need? Shelter, obviously - but that need can be met by a single-room apartment on the 23rd floor of a concrete tower. Millions of families, right now, live in single-room accommodation perfectly happily.

Where I live, that is not allowed. There are density laws, and laws requiring indoor working toilets, showers, sinks, cooking facilities. One of the problems of poverty in USA is the standards of habitability are so high (compared with bare minimum) there is nothing affordable for the lower economic edge.

My homeless acquaintance undoubtedly earns more in dollars than many families around the world, but that amount provides far less food clothing and shelter (and safety) than in many parts of the world.

Posted by Penny S (# 14768) on :

I've been looking at the Wikipedia article about Income in the UK.

Lots of tables, not enough graphs, not enough cited sources.

UK Income

Part way down is one relating income before tax to percentile rank. For last year it shows a mean of £29,900. The 50th percentile is £21,300. Milliband's £60,000 occurs somewhere between the 90th and 95th percentiles. That looks sufficiently above the mean, and above the bulk of households, to count as rich. The HMRC table for some years ago, above, shows that most taxpayers are in the lower part of the range, which figures. My feeling is that if someone's income is in the upper tail rather than the bulge of the distribution, they are rich - but it depends where that line is drawn.

Posted by Gramps49 (# 16378) on :

I think the estimate of $75,000 is too high for 80% of the United States while it is too low for the other 20%. In the central states one can get by for much less, but in the metropolitan areas it would be too low. It is very hard to say with certainly a family income of $75,000 is the ideal.

Posted by Leorning Cniht (# 17564) on :

To my mind, "rich" is mostly about security, and "rich" is mostly about wealth rather than income.

Do you know where your next meal is coming from?

Do you have to count the pennies when you shop?

Do you expect to have enough food and a home in a month?

Even if you lose your job?

What about three months?

These are increasing levels of richness, but to my mind "rich" unqualified means enough wealth to be able to stop work and live a comfortable middle-class life without worrying about your spending. You don't need to be able to ride in a private jet or bathe in champagne, but you need to be able to afford to eat in restaurants on a regular basis, buy nice clothes, take a foreign holiday or two a year, and generally not worry about money.

That, to my mind, is "rich", and in western society, you probably need between 5 and 10 million pounds, dollars or Euros for a couple to be able to live off the income like this indefinitely.

We have had plenty of examples on this thread of high-income spendthrifts, and of those on a low income who with careful budgeting are able to feel financially secure, but in terms of assessing who is, or is not, rich, we probably have to consider the position of an average person in that financial position rather than considering the individual.

Posted by Schroedinger's cat (# 64) on :

Here's the thing - My salary is at the lower end of the range quoted. My wife also works, bringing the family income over this level.

We live in the South East, in a fairly expensive area, and have a mortgage and 2 children still partially dependent on us financially.

I would consider that I am well off. Not "rich", but definately comfortable, and so the gospel call to em is to use my money to help those who are not. Which I do.

The claims that "£60,000 a year is not rich" is ludicrous in a country where so many people are earning significantly less than this amount. Where incomes of £20,000 are considered acceptable and reasonable, to claim that 3 times that is not rich does not hold water. It is.

The reason, I suspect, is that people like me have been squeezed by the Tories, and disowned by them, because we don't earn enough for them to be interested, so Labour are wanting to win this group of people over to them. Cynical politics once again.

It isn't working.

Posted by mark_in_manchester (# 15978) on :

This thread is close enough to an earlier one on ostentatious behaviour, that I'd like to quote a shipmate whose name I can't remember, who said something which stuck with me.

quote:
Being rich (ostentatious) is having a bowl-full of top-notch drinking water every day...and shitting into it.

Posted by alienfromzog (# 5327) on :

quote:
Originally posted by Schroedinger's cat:
It isn't working.

Spot on analysis.

But it's a bit early for that claim.

Whilst Labour's move on this point may be a little cynical, it may also be a little bit shrewd. As most of the people in this group don't think of themselves as rich (I think). And as you say there is a large number who are undecided voters. I also am (potentially) impressed by the unspoken part - that income tax might go up for those earning over £60,000. Speaking as one of them I just want to say about bloody time. Not least because of the insane way that taxation is increasingly skewed to indirect taxes.

AFZ

Posted by Zacchaeus (# 14454) on :

I read a piece of research a few years back, which sorry I can't find now.

But basically people in the UK, whatever their income, judged 'rich' as anybody who had £10,000 a year more than them

So for a £20,000 earner £30,000 is rich and for a £60,000 earner £70,000 is rich.

So an MP earning £60,000 won't see themselves as rich...

Posted by Bullfrog. (# 11014) on :

Apparently Harvard doesn't think that $60K per year qualifies as "rich."

Posted by lilBuddha (# 14333) on :

As it costs $5K more per annum to attend Harvard, by those standards it is not.

Posted by churchgeek (# 5557) on :

In my experience, no one thinks that they are rich. No matter what their income level, it seems people always compare themselves with those who have more.

Now, I'll happily admit I'm rich compared to many in the world, and compared with the people who beg for money on the streets locally, but it still doesn't get my bills paid, and I live a very simple life - again, in US terms. (Although there's really nothing significant I could cut out of my budget.)

But I'm not going to seriously call myself poor, either, because I've known people who are, and I don't have to deal with what they've had to deal with.

But to me, someone who earns $60K USD is Pretty Well-Off; $100K is unimaginable to me. More than that is rich.

Posted by Graham J (# 505) on :

I seem to remember a story about a wealthy man who was asked how much money he would need in order to be truly happy.

His answer?

Just a little bit more.

(Not sure that this contributes to the discussion - but I could't resist it having used the story in a sermon this afternoon)

Posted by orfeo (# 13878) on :

quote:
Originally posted by Leorning Cniht:
To my mind, "rich" is mostly about security, and "rich" is mostly about wealth rather than income.

Do you know where your next meal is coming from?

Do you have to count the pennies when you shop?

Do you expect to have enough food and a home in a month?

Even if you lose your job?

What about three months?

These are increasing levels of richness, but to my mind "rich" unqualified means enough wealth to be able to stop work and live a comfortable middle-class life without worrying about your spending. You don't need to be able to ride in a private jet or bathe in champagne, but you need to be able to afford to eat in restaurants on a regular basis, buy nice clothes, take a foreign holiday or two a year, and generally not worry about money.

That, to my mind, is "rich", and in western society, you probably need between 5 and 10 million pounds, dollars or Euros for a couple to be able to live off the income like this indefinitely.

We have had plenty of examples on this thread of high-income spendthrifts, and of those on a low income who with careful budgeting are able to feel financially secure, but in terms of assessing who is, or is not, rich, we probably have to consider the position of an average person in that financial position rather than considering the individual.

Well I guess that I'm not rich despite having spent 3 months overseas, eating out for the vast majority of meals, because eventually I'd have to go back to work in order to maintain my lifestyle.

I think I disagree with your definition. Because in my view I *am* rich. I think I'm incredibly lucky to be in a position to travel that long staying in reasonably nice hotels and B&Bs.

Posted by orfeo (# 13878) on :

quote:
Originally posted by churchgeek:
In my experience, no one thinks that they are rich.

I swear, I hadn't read this before making my last post.

Posted by Josephine (# 3899) on :

The L-curve is one way to see why folks who make a little, or even a lot more than you don't feel particularly rich.

Just looking at the L-curve, you can see that there's really not that much difference between someone who's at the 25th percentile and the 75th percentile in income. The latter are better off than the former, but not enough better off that the word "rich" makes sense.

But when you turn the corner on the curve, then "rich" is really the only word to use.

Keep in mind that the graphic shows income, not wealth, and that wealth is even more skewed. And keep in mind that this page is from 2007, and income and wealth distribution has become even more skewed in that time.

Posted by Gramps49 (# 16378) on :

This was from The Christian Left Facebook page:

Do you know one of the reasons “tax cuts” for top income brackets have destroyed the middle class and the economy? When tax rates for top income brackets were high it forced the wealthy to reinvest profit in economic activity rather than accumulate vast amounts of wealth. This is the reason CEO and Wall Street income levels are obscene now. “Trickle down economics” is the biggest farce ever sold to the American public. Things will only continue to get worse until people wake up to this fact. The “makers” are the people who get up and go to work every day for slave wages and poor working conditions. The “takers” are people in the top income brackets. No one needs that much money. When they have it they use it to accumulate power and unfair advantage.

Posted by Bullfrog. (# 11014) on :

Might be more about wealth than income. A person, I imagine, could be living on a pretty big income and still be living more or less paycheck to paycheck due to expenses, such as living in a high rent area like NYC, or a severe medical condition that required ongoing treatment, expensive hobbies, kids going to expensive schools, or something like that.

Maybe nobody feels rich until they know that they're financially secure to death. But then, you have children, and so it stretches ad infinitum?

Posted by RuthW (# 13) on :

quote:
Originally posted by mark_in_manchester:
This thread is close enough to an earlier one on ostentatious behaviour, that I'd like to quote a shipmate whose name I can't remember, who said something which stuck with me.

quote:
Being rich (ostentatious) is having a bowl-full of top-notch drinking water every day...and shitting into it.

I thought it was bullshit then, and I still think so. This isn't rich. It's proper sanitation, and it's what every single person on the planet should have, and I don't feel bad that I have it -- I'm grateful. I'm going to keep right on peeing and shitting in clean water rather than in the gutter, and so will my neighbors, and we won't get cholera and all the other horrid diseases people get from poor sanitation.

Posted by orfeo (# 13878) on :

Indeed. The primary means of KEEPING clean drinking water for everyone is a planned system to keep the drinking water and the shitting water separate.

Posted by The Midge (# 2398) on :

quote:
Originally posted by RuthW:

quote:
Originally posted by mark_in_manchester:
This thread is close enough to an earlier one on ostentatious behaviour, that I'd like to quote a shipmate whose name I can't remember, who said something which stuck with me.

quote:
Being rich (ostentatious) is having a bowl-full of top-notch drinking water every day...and shitting into it.
I thought it was bullshit then, and I still think so. This isn't rich. It's proper sanitation, and it's what every single person on the planet should have, and I don't feel bad that I have it -- I'm grateful. I'm going to keep right on peeing and shitting in clean water rather than in the gutter, and so will my neighbors, and we won't get cholera and all the other horrid diseases people get from poor sanitation.

But you can do that by using one of these.

Posted by The Midge (# 2398) on :

quote:
Originally posted by Josephine:
The L-curve is one way to see why folks who make a little, or even a lot more than you don't feel particularly rich.

Just looking at the L-curve, you can see that there's really not that much difference between someone who's at the 25th percentile and the 75th percentile in income. The latter are better off than the former, but not enough better off that the word "rich" makes sense.

But when you turn the corner on the curve, then "rich" is really the only word to use.

Keep in mind that the graphic shows income, not wealth, and that wealth is even more skewed. And keep in mind that this page is from 2007, and income and wealth distribution has become even more skewed in that time.

It took me a while to figure out that you have to zoom in and out to make sense of it. Mindboggling. But I don't think that Bill Gates is the only rich person in the world.

My Father in Law goes ape when wound up about the 1970's tax policy. "They were basically taxing wealth" he used to say about the high rates that were effectively more than people earned.

Wealth is the one thing that doesn't seem to be taxed. Income or revenue is taxed. Spending is taxed (VAT or Sales taxes). Water is taxed. But hoarded wealth isn't. Maybe it should be.

Capital gains tax can be avoided for the most part as can inheritance tax. Our Council (property tax) is heavily skewed towards the middle/ lower end of the market.

Try telling people that they should sell their family home to pay for their care (and give the money and space to the next generation to live with their family) and it is politically unpalatable.

Really Christians should be beyond all of this- with teachings and eternal perspective that should mean that we should not worry too much about redistributing our wealth. I am rich enough to do love my poor neighbour. That would make the world a better place.

Posted by Golden Key (# 1468) on :

quote:
Originally posted by The Midge:
Jesus said that the poor will always be with us after being treated to footbath of hugely expensive perfume from a high class hooker (maybe she charged thousands for her affections).

FYI: Nothing in the Bible says she was a hooker. Not one word.

Posted by Doublethink (# 1984) on :

The people with IQs in the top 2.5 % are geniuses, it doesn't mean no one else is intellingent.

Using the top 5% to define who is rich seems a bit bonkers. *If* income is normally distributed, 1 standard deviation away from the mean would seem a reasonable cut off.

I certaintly don't think you are not rich unless you can afford to choose to have no working adult in your household, whilst being able to have all the goods and services you want.

I consider myself rich, though I earn less than 60k.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Doublethink:
I consider myself rich, though I earn less than 60k.

But do you consider yourself to be so rich that you should suffer punitive rates of taxation in order to shift some of your ill-gotten gains to poorer people?

Part of the problem here is the way the same word - "rich" - is used to mean far different things. There are plenty of socialists who will happily state that rich people are basically evil, that no-one can become rich without exploiting the poor, that rich people neither deserve nor need so much income, and that they should be heavily taxed so that wealth can be more "fairly" distributed. Should those statements apply to someone who earns a mere £60k a year before tax? Hell, that's not even a senior management salary these days, let alone Board Member money.

Posted by orfeo (# 13878) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Doublethink:
I consider myself rich, though I earn less than 60k.
But do you consider yourself to be so rich that you should suffer punitive rates of taxation in order to shift some of your ill-gotten gains to poorer people?

'Punitive' rather begs the question, doesn't it?

There are definitely benefits I don't get and taxes I pay because of my income. It seems fair enough to me. My capacity to pay is such that I'm not drastically impacted.

When the rules for private health insurance changed here relatively recently, I found that the government would only pay 10% of the cost instead of the previous 30%. They still pay 30% for people on lower incomes. Maybe I'm weird, but I didn't find myself getting worked up about the fact that I now only get a 10% discount. Firstly, it's still a discount. Secondly, I didn't have any kind of feeling that the additional cost was going to drastically impact my life.

But that probably has something to do with me living well inside my means, and I know I'm weird in that respect.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Doublethink:
I consider myself rich, though I earn less than 60k.
But do you consider yourself to be so rich that you should suffer punitive rates of taxation in order to shift some of your ill-gotten gains to poorer people?

Part of the problem here is the way the same word - "rich" - is used to mean far different things. There are plenty of socialists who will happily state that rich people are basically evil, that no-one can become rich without exploiting the poor, that rich people neither deserve nor need so much income, and that they should be heavily taxed so that wealth can be more "fairly" distributed. Should those statements apply to someone who earns a mere £60k a year before tax? Hell, that's not even a senior management salary these days, let alone Board Member money.

You're conflating waaaay too many separate issues here, and that's the problem. Addressing each separately is far more helpful:

#1. "plenty of socialists who will happily state that rich people are basically evil, that no-one can become rich without exploiting the poor, that rich people neither deserve nor need so much income." That's probably hyperbole, at least in the US. I would assume most here would disagree with such a blanket statement. The perjorative tone is unnecessary. What is helpful is to note that almost anyone who is able to accumulate significant wealth these days either did so thru inheritance or thru the contributions of many others-- thru careful use of government subsidies, the efforts of very lowly paid workers, etc. That doesn't make them "evil", it does mean that they necessarily "exploited" the poor. But it is relelvant to the discussion of variated tax rates. Removing the perjorative tone (if it exists) is important,

#2. "you should suffer punitive rates of taxation in order to shift some of your ill-gotten gains to poorer people?" goes to the purpose of taxation-- is it to redistribute resources, it is punishment of evil-doers-- or is it simply the way we support a stable govt (recognizing the rich consume more govt services than the poor) and/or encourage economic activity? One can support higher taxes for the wealthy for any/all of these reasons, but the motivation is quite different.

3. "Should those statements apply to someone who earns a mere £60k a year". After you parse out the above statements and get away from the inflammatory "taxation is punitive" rhetoric, you're going to most likely advocate a graduated taxation system, where there won't be any hard-and-fast cut off points, but simply see that those making £60k pay a smaller % than those making £120k and a larger % than those making £30k .

Posted by Justinian (# 5357) on :

How rich is rich?

There are two functional definitions I'm aware of.

1 The Transitive Definition:
I earn a decent amount of money. (The speaker almost always fits this)
They own or earn significantly more than I do so they are rich.
They own or earn significantly less than I do so they are poor.

2: The Functional definition:
If I am geting deeper in debt each month I'm sinking.
If I am living paycheck to paycheck and breaking even I am struggling.
If I don't need to worry about money and add a decent sum to my savings every month I am well off.
If I could cash up now and never have to work again for the rest of my life I am rich.
If I never had to work in the first place because I inherited everything I'd need I am an aristocrat.

Posted by Karl: Liberal Backslider (# 76) on :

I have to say I don't know anyone around here who'd use the term "mere" anywhere near "£60K a year" unless they were being ironic. I don't know anyone on anything approaching that in my social circle. It seems a lot to me.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by cliffdweller:
What is helpful is to note that almost anyone who is able to accumulate significant wealth these days either did so thru inheritance or thru the contributions of many others-- thru careful use of government subsidies, the efforts of very lowly paid workers, etc.

"Significant wealth", maybe. But that isn't at all the case for someone on £60k a year. My boss earns far more than that, and to my knowledge she hasn't inherited a bean or requiored anyone else's help (not counting her fellow workers and staff - myself included - who are all being paid for their efforts as well).

quote:
(recognizing the rich consume more govt services than the poor)

Can you back that claim up, because to me it seems completely backwards. Especially given that the richer someone is, the less likely they are to be reliant on government-provided healthcare or education.

[ 23. September 2013, 15:58: Message edited by: Marvin the Martian ]

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Karl: Liberal Backslider:
I have to say I don't know anyone around here who'd use the term "mere" anywhere near "£60K a year" unless they were being ironic. I don't know anyone on anything approaching that in my social circle. It seems a lot to me.

It's approximately £4,000 more than my wife and I currently earn - if I get the job I'm applying for, we'll be on a combined income greater than £60k. And yet we still have times where there's not a massive amout of money left at the end of the month - another five or ten thousand per year would really help. I certainly don't think we're rich, and I don't think we'd be rich if only one of us was working and bringing in the whole amount on their own, given that such a situation would be exactly the same in terms of what we could afford to buy and do. And in a hypothetical situation where we had the same income from only one partner with the other partner staying at home to look after a child or two (and the extra expenses that come with them), I think we'd be just about getting by financially.

OK, fine, we could live more cheaply by always eating crap food from Lidl or the chippy, driving a crap car and never going for an evening out or on holiday. But as far as I'm concerned, if we had to do all that then we'd be poor.

Posted by Josephine (# 3899) on :

quote:
Originally posted by Marvin the Martian:

quote:
(recognizing the rich consume more govt services than the poor)
Can you back that claim up, because to me it seems completely backwards. Especially given that the richer someone is, the less likely they are to be reliant on government-provided healthcare or education.

The rich benefit proportionately more from the civil courts (poor people don't hire lawyers to help them enforce contracts, for example), from fire protection services, flood control, and other government services and infrastructure that protect property (having more property to protect), from transportation infrastructure (they travel more, and they acquire more stuff that was transported from hither to yon).

The rich use more medical services than poor people, and the training for their doctors (and the research for new medical services) is heavily funded and subsidized by public funds. The rich rarely grow their own food or make their own furniture, but buy more of it than the poor, so they benefit disproportionately from the regulatory apparatus to ensure the safety of food and other consumer products.

The rich are far more likely than the poor to visit national parks and to go on treks in national wilderness areas. These lands are maintained for the benefit of all -- but you have to have the money for the travel and equipment and time away from work to enjoy them.

Do we need to go on?

Posted by Gwai (# 11076) on :

quote:
Originally posted by Marvin the Martian:
And yet we still have times where there's not a massive amout of money left at the end of the month - another five or ten thousand per year would really help.

[cut parts not relevant to what I'm saying]

OK, fine, we could live more cheaply by always eating crap food from Lidl or the chippy, driving a crap car and never going for an evening out or on holiday. But as far as I'm concerned, if we had to do all that then we'd be poor.

Then I think most people (even in the UK, USA, etc.) are poor, Marvin. We can all easily use up all of our money each month things we think we need. At least anyone who's not seriously a millionaire can. If that's the definition of rich, I think we are into only millionaires are rich, and not all of them even.

[Edited because of crosspost]

[ 23. September 2013, 16:41: Message edited by: Gwai ]

Posted by Josephine (# 3899) on :

quote:
Originally posted by Gwai:
Then I think most people (even in the UK, USA, etc.) are poor, Marvin. We can all easily use up all of our money each month things we think we need. At least anyone who's not seriously a millionaire can. If that's the definition of rich, I think we are into only millionaires are rich, and not all of them even.

Again, take a look at the L-curve. Use the zoom buttons and scroll from one end to the other. That's how income is distributed in our country. Which means that the person on food stamps and the millionaire are a lot closer to each other than either is to anyone at the very top of the income distribution.

This also explains why the majority can no longer get laws passed in this country. Money is power. And that power is in fewer and fewer hands. We're no longer a democracy. We're a plutocracy. We really are.

The folks at the top manage to keep the rest of us fighting with each other for crumbs, so we never notice what they've taken from all of us. And it's working.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Gwai:
Then I think most people (even in the UK, USA, etc.) are poor, Marvin.

I don't think it's a binary thing where you're either rich or you're poor. There's a large part of the middle of the spectrum where you're neither.

I'm not poor, and I'm happy to affirm that. But I'm not rich either.

Posted by Gwai (# 11076) on :

Oh, I know, and it's ridiculous. It's just that I think millionaires are the first people who can actually manage to say they've bought about everything they want and still have money left over. I know that if we went to visit family 1/5 as often we wanted, we'd be broke. Let alone if we even occasionally went on vacations to a destination (as opposed to going to see family. I don't at all blame Marvin for being able to do some of these things, if he can--different choices. But I consider myself to make a good salary, and I think we are living comfortably. If we didn't owe money, I think we would be doing very well. In fact, maybe I'm trying to make a similar point to that L-curve--there may be people well below you (income-wise) who are not living all that differently, and the people above you are probably having to worry about their budgets too.

Posted by Karl: Liberal Backslider (# 76) on :

I do know that the food from Lidl isn't crap. Well, not all of it, rather like Sainsburys in that regard.

Posted by Karl: Liberal Backslider (# 76) on :

Sensible point though - of the people I know well, I think I earn the most. When Mrs Backslider goes back to work (the kids are a bit older now) we'll have a combined income around that £60K. Given that as I just said I don't think I know anyone closely on more than that, we're rich by definition.

Hence even though I can readily see us bringing in that much combined, I can't call it "mere". It's more than everyone I know well manages on.

Posted by LeRoc (# 3216) on :

A packet of spaghetti is a packet of spaghetti, whether you buy it at Lidl or at Waitrose.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by cliffdweller:
What is helpful is to note that almost anyone who is able to accumulate significant wealth these days either did so thru inheritance or thru the contributions of many others-- thru careful use of government subsidies, the efforts of very lowly paid workers, etc.
"Significant wealth", maybe. But that isn't at all the case for someone on £60k a year. My boss earns far more than that, and to my knowledge she hasn't inherited a bean or requiored anyone else's help (not counting her fellow workers and staff - myself included - who are all being paid for their efforts as well).

quote:
(recognizing the rich consume more govt services than the poor)
Can you back that claim up, because to me it seems completely backwards. Especially given that the richer someone is, the less likely they are to be reliant on government-provided healthcare or education.

The point I'm making is that NO ONE makes any amount of money in isolation. You make money because you live in a society with good roads to move products to market, an educated workforce you can draw upon as laborers, a good court system to enforce contracts, etc. Without that, doing business-- any business, on any scale-- would be difficult and significantly more risky (try doing business is Somalia). Your boss DID require help because all of those things-- paid for by the taxpayers-- contributed to her success. Which is not to say that her own effort, ingenuity, drive, hard work and financial investment wasn't a factor, even a greater factor. Simply that that didn't happen in a vacuum.

Same thing with #2. The rich consume more of a different sort of government services. They obviously won't be using food stamps or welfare benefits, and, as you note, are less likely to be using public education or health care. But, simply because they have more to lose (in terms of possessions), they are using more of other sorts of services-- for example, police and fire protection, court system, etc. They are also more likely to take advantage of things like price supports, trade deals, etc. That's all hard to quantify, although some shipmate may be able to put your google finger on some economist's estimate.

Posted by cheesymarzipan (# 9442) on :

I'm not sure whether we are rich or not - on the one hand, we can eat meat every day, we can even throw it away if it's gone off and buy more. I even bought a very nice pair of sharp knives recently to help me cut up all my food. But we aren't saving any money at the moment, we're renting, we don't have a car or any children.
Apparently I'm earning roughly a living wage for a single adult living where I do.

Maybe this could be a rule of thumb for how rich you are - if you were asked to work overtime, paid at your normal hourly wage, would you work it, or would you rather go home? How many hours a week would you do - 5, 10, 20? How many weeks would you do that for? Would it be a different number if you could work the overtime from home?

Posted by Gwai (# 11076) on :

quote:
Originally posted by cheesymarzipan:
Apparently I'm earning roughly a living wage for a single adult living where I do.

I'm pretty sure my husband and I prefer living more cheaply than most do, but still I somewhat sceptical of that site. It may not translate well to the US as it says we live off of 50-60% of what we would need to survive; even though we are paying back student loan etc debt every month, so we are clearly doing okay.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by cliffdweller:
The point I'm making is that NO ONE makes any amount of money in isolation. You make money because you live in a society with good roads to move products to market, an educated workforce you can draw upon as laborers, a good court system to enforce contracts, etc. Without that, doing business-- any business, on any scale-- would be difficult and significantly more risky (try doing business is Somalia). Your boss DID require help because all of those things-- paid for by the taxpayers-- contributed to her success. Which is not to say that her own effort, ingenuity, drive, hard work and financial investment wasn't a factor, even a greater factor. Simply that that didn't happen in a vacuum.

If nobody earns what they earn in isolation, why does that only ever get pointed out when talking about richer people? Everybody gets the benefit of education, roads, etc. so why not split the cost equally or proportionately to income?

quote:
Same thing with #2. The rich consume more of a different sort of government services. They obviously won't be using food stamps or welfare benefits, and, as you note, are less likely to be using public education or health care. But, simply because they have more to lose (in terms of possessions), they are using more of other sorts of services-- for example, police and fire protection, court system, etc. They are also more likely to take advantage of things like price supports, trade deals, etc. That's all hard to quantify, although some shipmate may be able to put your google finger on some economist's estimate.

I'm not convinced that having more stuff means requiring more police/court time. They only get involved if a crime is committed, and I'm sure I've read that poorer people are victims of crime more often than rich. Plus, rich people can afford their own lawyers rather than needing state-provided ones.

Of course, the clincher for this sub-debate is simple: if the rich we're using more government resources than the poor, why would taxing them at higher rates be redistributive?

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by cliffdweller:
The point I'm making is that NO ONE makes any amount of money in isolation. You make money because you live in a society with good roads to move products to market, an educated workforce you can draw upon as laborers, a good court system to enforce contracts, etc. Without that, doing business-- any business, on any scale-- would be difficult and significantly more risky (try doing business is Somalia). Your boss DID require help because all of those things-- paid for by the taxpayers-- contributed to her success. Which is not to say that her own effort, ingenuity, drive, hard work and financial investment wasn't a factor, even a greater factor. Simply that that didn't happen in a vacuum.
If nobody earns what they earn in isolation, why does that only ever get pointed out when talking about richer people?

You're kidding me, right? The debt that the poor owe to society is CONSTANTLY being pointed out-- including in your own posts here. The poor are constantly reminded that they are being supported by "government handouts" whether it's food stamps or government cheese (flashback to the 80s) or whatever. It is only the wealthy who are under the illusion that they have reaped no benefit from society as a whole or the government.

quote:
Originally posted by Marvin the Martian:
Everybody gets the benefit of education, roads, etc. so why not split the cost equally or proportionately to income?

Well, as pointed out, that's not entirely true. As was pointed out, the rich travel more than the poor-- so they use more roads, national parks, etc. And the point of a graduated tax system as advocated here is in fact, to split the cost proportionally.

quote:
Originally posted by Marvin the Martian:

quote:
Same thing with #2. The rich consume more of a different sort of government services. They obviously won't be using food stamps or welfare benefits, and, as you note, are less likely to be using public education or health care. But, simply because they have more to lose (in terms of possessions), they are using more of other sorts of services-- for example, police and fire protection, court system, etc. They are also more likely to take advantage of things like price supports, trade deals, etc. That's all hard to quantify, although some shipmate may be able to put your google finger on some economist's estimate.
I'm not convinced that having more stuff means requiring more police/court time. They only get involved if a crime is committed, and I'm sure I've read that poorer people are victims of crime more often than rich. Plus, rich people can afford their own lawyers rather than needing state-provided ones. [/QB]

I'm not suggesting that the rich are more subject to crime, at least the breaking-and-entering type. In fact, as you suspect, the poor are more frequent victims of crime of that sort. Rather, I'm talking about the financial consequences: the rich have more property to protect, from fire, from theft, or from fraudulent "bad players" (i.e. needing the protection of the court system).

While the rich can and do hire their own lawyers, that doesn't help them much in a place like Somalia where there isn't a strong court system. Having good lawyers only helps you if you have strong courts backed by a strong government. The rich are significantly more likely to use those courts for civil actions-- enforcing contracts, etc.-- again, simply because they have more to protect.

And you don't need to particular USE services to benefit from them. The fact that we have strong courts and strong police systems are an obvious deterrent to would-be criminals-- whether garden-variety burglars or a while collar con artist who doesn't uphold his end of a business contract.

All of that without even getting into the question of police and fire response times in affluent neighborhoods vs. inner city.

quote:
Originally posted by Marvin the Martian:

Of course, the clincher for this sub-debate is simple: if the rich we're using more government resources than the poor, why would taxing them at higher rates be redistributive?

I'm not really sure how to answer this, because it seems like basic math: if group A pays less of the total cost of government, then increasing the percentage they pay would obviously redistribute wealth. I'm not sure what needs explaining there?

Posted by Doublethink (# 1984) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Doublethink:
I consider myself rich, though I earn less than 60k.
But do you consider yourself to be so rich that you should suffer punitive rates of taxation in order to shift some of your ill-gotten gains to poorer people?

Part of the problem here is the way the same word - "rich" - is used to mean far different things. There are plenty of socialists who will happily state that rich people are basically evil, that no-one can become rich without exploiting the poor, that rich people neither deserve nor need so much income, and that they should be heavily taxed so that wealth can be more "fairly" distributed. Should those statements apply to someone who earns a mere £60k a year before tax? Hell, that's not even a senior management salary these days, let alone Board Member money.

I think it frankly odd that, in a recession, when I am single, employed fulltime, and own my own house outright - everytime there was a budget in the last three years I end up slightly better off or down by an annual total of about 50p, on a bad year maybe a whole tenner.

At the same time I work with people who are barely getting by. It doesn't seem right.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by cliffdweller:
if group A pays less of the total cost of government, then increasing the percentage they pay would obviously redistribute wealth. I'm not sure what needs explaining there?

It only redistributes wealth if the extra tax ends up going to group B. if it just (or mostly) gets spent on group A anyway, then it's still being spent on group A and isn't being redistributed.

Posted by Lucia (# 15201) on :

When we lived in the UK we certainly didn't feel very rich although on paper our combined salaries looked reasonable (though not in the 60K bracket). However as someone said earlier a large chunk of it was swallowed up in housing costs each month. In our case a mortgage on a modest 1970's housing estate semi - nothing very fancy. Although I was working two days a week I was paying out over £100 per week on childcare, so that was another significant chunk gone. Housing costs, childcare costs, fuel costs are all significant drains on what looks like a fairly decent income.

These days whether I feel rich or poor depends on the who I am comparing myself to. Living in Tunisia I am aware that we have so much more than so many people here and are very blessed to have a comfortable home and enough money to allow for treats and holidays. Today I visited the home of a local woman which reminded me again of my relative wealth. Her home is a simple courtyard with a few rooms opening off it, in a poor and densely populated part of the city. (However even in Tunisia a TV is considered a pretty basic essential!)I am rich in comparison. However our kids go to an International school, their school friends are the children of doctors, diplomats, business people and other well off members of society. We are volunteer overseas development workers living in a slightly shabby apartment, with an old CRT TV, no smartphone, no ipad, no swimming pool, no Mercedes to drive. When I pick up our kids from birthday parties in the beautiful homes of their friends I don't feel very rich at all! At times we have worried about money as unexpected expenses have come up but somehow we always seem to have been provided for by the generosity of others, prompted we feel by our heavenly father who knows what we need.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by cliffdweller:
if group A pays less of the total cost of government, then increasing the percentage they pay would obviously redistribute wealth. I'm not sure what needs explaining there?
It only redistributes wealth if the extra tax ends up going to group B. if it just (or mostly) gets spent on group A anyway, then it's still being spent on group A and isn't being redistributed.

We're not talking about changing the budgeted items-- the total expenditures on things like the courts, police and fire protection-- those services that benefit the rich more than the poor-- remain the same, so there's no "extra tax" for group A to spend on services. Rather, we're suggesting that if group A (the rich) pay more taxes then group B (the poor) is able to pay somewhat less taxes, while the level of services to both rich and poor remains the same. Thus you have effectively "redistributed" wealth-- in a way that, to myself at least (not one of the "poor"), seems fair.

[ 23. September 2013, 22:28: Message edited by: cliffdweller ]

Posted by Mr. Rob (# 5823) on :

quote:
Originally posted by The Midge:

£60K a year not rich? ... But what is rich?

"A woman can never be too rich or too thin."

-Wallace Warfield Simpson, Duchess of Windsor

*

Posted by piglet (# 11803) on :

It's all relative, isn't it? I think it was Dickens who said something like:

quote:
Annual income £100, annual expenditure £99 - result: happiness
Annual income £100, annual expenditure £101 - result: misery

He was probably about right.

We dream of an income of £60,000; for the first 7 years we lived here in Canada I wasn't eligible to work, and our gross income was about $25,000 - $30,000.* When I got a job two years ago it went up by $20,000. While we're not on the bread-line, we're nowhere near what I'd call "rich".

I think my definition of "rich" in financial terms would be "never having to worry about money".

* When we moved here 10 years ago the pound was worth about $2.40; for the last 5 years or so it's been more like about $1.60.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by piglet:
It's all relative, isn't it? I think it was Dickens who said something like:

quote:
Annual income £100, annual expenditure £99 - result: happiness
Annual income £100, annual expenditure £101 - result: misery
He was probably about right.

Mr. Micawber in David Copperfield. (And IIRC twenty pounds was the income, with expenditures of nineteen, nineteen and six or twenty, ought and six to land you in happiness or misery.)

quote:

I think my definition of "rich" in financial terms would be "never having to worry about money".

Yes, I think that's it.

Posted by Gramps49 (# 16378) on :

In updating my congregation's facebook page, I came across the epistle for next Sunday.

"For we brought nothing into this world. But if we have food and clothing, we will be content with that." 1 Timothy 6:7,8

As I look at some of the comments here, I note some have said those with high income do not feel rich, while some who have low income have said they feel rich.

I think the writer to Timothy would say if you are content with what you have, you are rich.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by piglet:
I think my definition of "rich" in financial terms would be "never having to worry about money".

I'd agree. And I'd say that under that definition, one isn't really rich until one has at least a million. I'm not sure what level of annual income that translates to, but it sure as heck ain't £60,000!

Posted by Justinian (# 5357) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by piglet:
I think my definition of "rich" in financial terms would be "never having to worry about money".
I'd agree. And I'd say that under that definition, one isn't really rich until one has at least a million. I'm not sure what level of annual income that translates to, but it sure as heck ain't £60,000!

Last time I checked the equivalent to £1m capital was around £100k income, but interest rates and the like have changed since then.

[ 24. September 2013, 10:14: Message edited by: Justinian ]

Posted by barrea (# 3211) on :

We get the majority of our food from Aldi and save about a third on our bill, and and most of the food there is really good. We could now afford to shop at Waitrose(just about)but why waste money. Some people are just too snobbish about where they shop. I don't know much about lydl but know people that are pleased with it.

Posted by Karl: Liberal Backslider (# 76) on :

quote:
Originally posted by barrea:
We get the majority of our food from Aldi and save about a third on our bill, and and most of the food there is really good. We could now afford to shop at Waitrose(just about)but why waste money. Some people are just too snobbish about where they shop. I don't know much about lydl but know people that are pleased with it.

It's much the same as Aldi but is better for cold meats. And it does more cereal bars that don't contain milk products.

Posted by cheesymarzipan (# 9442) on :

quote:
Originally posted by Gwai:

quote:
Originally posted by cheesymarzipan:
Apparently I'm earning roughly a living wage for a single adult living where I do.
I'm pretty sure my husband and I prefer living more cheaply than most do, but still I somewhat sceptical of that site. It may not translate well to the US as it says we live off of 50-60% of what we would need to survive; even though we are paying back student loan etc debt every month, so we are clearly doing okay.

It does seem quite a high figure - I would say that we were comfortable rather than scraping by. I'd say their figures for food costs are higher than they need to be, for instance.
Cost of living varies between countries, of course - transport costs are quite high here.
Here's a Living Wage calculator for the USA to compare with.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by cheesymarzipan:
It does seem quite a high figure - I would say that we were comfortable rather than scraping by. I'd say their figures for food costs are higher than they need to be, for instance.

I think both sites (US and Irish) have a slightly generous food allocation. Other than that, the US site is rather meaner about what it calls necessary expenses than the Irish one. I gave it my details, and I would say that it significantly lowballs housing.

The Irish one also allocates very much more for clothing, beer etc.

I'd say that the Irish site is aiming at a pleasant, comfortable life, whereas the US site is aiming at "not on the streets".

Posted by Erroneous Monk (# 10858) on :

As I understand it, because of inflation, you'd now need £7 million to have the "millionaire" lifestyle envisaged in songs like "Who wants to be a millionaire?"

Of course, if someone offered me £1 million, I'd take it - I wouldn't be asking where the other £6 million was. [Big Grin]

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