President Biden has drawn a pretty clear-cut line at the amount of money he believes makes someone rich. In numerous speeches, he’s said that those making $400,000 or more should pay a higher tax rate because “they can afford to pay a little more.”
Biden has proposed a tax increase on high-income earners to help pay for the social spending the country has done to offset economic problems caused by the pandemic.
In a joint interview with Vice President Harris, Biden said, “I will raise taxes for anybody making over $400,000,” and anyone making less than that would face “no new taxes.”
A breakdown by CNBC found that for the most part, Biden has been honest about his plan, and the only people who make less than $400,000 a year who would see a hike in their taxes are those who had a windfall event that put them over the threshold.
It’s worth noting that Biden’s idea of who is wealthy is a bit different than the man he served under as vice president. When Barack Obama was president he sought to raise taxes on the wealthy who he saw as those making $250,000 or more.
On the surface level, $400,00 does seem like a lot of money in comparison to the average American. Those making $400,000 and above represent the top 1.8% of taxpayers, earning about 25% of the nation’s income.
Some people make the point that $400,000 isn’t that much money for someone who lives in an expensive area such as Manhattan or San Francisco. However, the average household income in Manhattan is $138,000 so you’re doing pretty well if you’re making $400,000 or more.
That is assuming that you’re not wasting your money living extravagantly.
Twitter user Chief Resistance Officer asked his 30,000-plus Twitter followers if making $400,000 a year is considered “rich” and he got some thoughtful responses. The overwhelming opinion seems to be that if you make that much you are probably rich. If you’re making $400,000 or more and living paycheck-to-paycheck, you’re probably being irresponsible with your money.
Yes, $400k is rich.
