The Difference Between Class & Income
22nd February 2018
The Antiplanner explains it all to you.
Business Insider is stunned by the notion that Silicon Valley residents who earn $400,000 a year consider themselves middle class. Yet they are; the only reason Business Insider doesn’t think so is that neither it nor Palo Alto Online — the source of Business Insider‘s data — understands the difference between class and income.
According to the Pew Research Center, “middle class” includes families of four that earn $48,000 and $144,000. But that’s not middle class; that’s middle income. While classes and incomes can be correlated, they are not the same. Social classes include upper, middle, and lower, but most of lower being working class.
Many people in America with top-tier incomes consider themselves ‘middle class’ and, effectively, they are — because their attitudes are ‘middle class’, since that’s the way they were raised.
This is more than just a quibble because working-class, middle-class, and upper-class people tend to have very different tastes and preferences. A working-class person who manages to earn $239,000 a year still shares more preferences with working-class people than upper-class people. An upper-class person who doesn’t earn much money one year still has tastes similar to other upper-class people.
One of the driving motivations behind rich people advocating higher income tax rates is a desire to keep middle-class people who just happen to have high incomes away from upper-class amenities such as hotels, restaurants, and resorts. Aside from the fact that these people, if they were serious, could just write a check to the IRS, the key is that they advocate raises in tax rates on ordinaryx income, such as wages, but not on the dividend and capital gains income that represents the chief source of really rich people’s wealth. The main reason Warren Buffet pays tax at a lower rate than his secretary is that she’s being taxed on wages and he’s being taxed on capital gains. But the fawning articles in The Press never tell you that.