Middle Income is Not $250,000!

The Tax Policy Center’s Howard Gleckman points out the 10 biggest differences in President Obama and Mitt Romney’s tax plans in his newest piece. At the end, he points out a couple of ways that the candidates are similar:

And both apparently believe that households making up to $200,000 or $250,000 are middle-income.

It’s amazing that we just gloss over this like it’s okay. Gleckman is right here. Romney deems the high-end of middle-income Americans to be $250,000 while Obama has continually pushed to raise taxes on high-income Americans, starting at $250,000.

In what world is making $250,000 a year middle class? Or $230,000? Or $200,00?

Here’s the Census Bureau’s 2011 estimates for household income and where that falls across America:

United States
Estimate Margin of Error
Quintile Upper Limits:
Lowest Quintile 20,585 +/-48
Second Quintile 39,466 +/-89
Third Quintile 63,001 +/-119
Fourth Quintile 101,685 +/-108
Lower Limit of Top 5 Percent 187,087 +/-436

The 95th percentile of Americans makes $187,087 a year! And yet, we’re okay saying that earning $250,000 a year is the upper limit! Once you look at the numbers, it’s crazy but we’ve grown to accept it.

Why? I’d hypothesize that people making $250,000 really do believe that they’re in the middle class. They hear all about these millionaires and billionaires and don’t put themselves in the same category as them. And it’s true, they aren’t in the same category: those billionaires and millionaires are at the high level of upper class, but households making $250,000 a year are certainly still upper class.

But this also works in the opposite direction as well. People at the other end of the spectrum dream of making it to the middle class. They want to believe that making $250,000 a year is middle class because that sounds attainable for them. If we were to drop the upper limit of middle-class down to the 80th percentile – $101,685 – people in the lowest 20 percent would probably find themselves disheartened. Yes, low-income households dream of making $100,000 a year but they also dream of a lot more. If we lower the upper limit of the middle class, we may cut back their dreams.

Of course, that’s just a hypothesis. But it doesn’t make it okay for the media to let this lie permeate across every campaign, tax proposal and policy statement. It’s tough to make arguments about the tax code when we are so clueless about what income level constitutes the middle class.

Dullest Campaign Ever

In David Brooks’s column in the New York Times today, he rattles off 10 reasons why this presidential campaign is so incredibly boring. He rightfully scolds Mitt Romney for running “the closest thing to  a policy-free race as any candidate in my lifetime” and criticizes President Obama’s proposals as “small and medium-size retreads.” I disagree with Brooks’s description of the President’s proposals – does he really consider the American Jobs Act small?

But I also think the reason he considers these ideas retreads is that Obama has been in office for four years. He hasn’t been keeping a secret agenda from the American public just to unveil it on the campaign trail. In addition, Democrats have been pushing many of the ideas he supports for years. Policy experts and the media have thoroughly dissected every policy proposal. There isn’t anything new to report.

And even if Romney did reveal which policies he supports, the media would only be able to do so much with it. In all likelihood, those policies would be conservative retreads as well.

But Brooks makes another point that I think is more important:

[T]echnology is making campaigns dumber. BlackBerrys and iPhones mean that campaigns can respond to their opponents minute by minute and hour by hour. The campaigns get lost in tit-for-tat minutiae that nobody outside the bubble cares about. Meanwhile, use of the Internet means that Web videos overshadow candidate speeches and appearances. Video replaces verbal. Tactics eclipse vision.

This is 100 percent true and it’s sad, as I’m not sure there’s much that will change either. If the media collectively decided to ignore the gaffes that attract viewers, then maybe we could break out of this technology-driven monotony. But the majority of viewers are strongly split between Obama and Romney. They want to see passionate  speeches from the candidate they support and gaffes from the candidate they don’t. They don’t want to see wonky, policy speeches. So if a media station decides to focus on policy over gaffes (ala The Newsroom), it’s just going to see viewership decrease (ala The Newsroom). Welcome to presidential campaigns in the 21st century!