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.
If someone makes $400,000 per year do you could consider them "rich"?— Chief Resistance Officer (@Chief Resistance Officer) 1633009236.0
Yes, $400k is rich.
$400,000 a year is roughly $33,000 per month.
The poverty level for a family of four is $26,500 per year.
Yes, they are rich.
— Eric Foltz (@EricFoltz) September 30, 2021
If you pay for housing, utilities, food, clothes, transportation, healthcare, occasional gifts and entertainment, and a few meals out every month without going into debt, yes, you're rich, by any standard of history.
You don't need to be Warren Buffett to be rich.
— Alonso Quixano 😷 (@craving_filled) September 30, 2021
They can comfortably pay all their bills, a hefty mortgage, enjoy the best food, travel, pay for their kids to go to school/college & still invest a good chunk to prepare for a nice retirement. That's RICH - in a country with 38 million people who suffer food insecurity.
— 🇺🇸PeaceLove&Outrage ☮️💕😡 (@1980Dorothy) September 30, 2021
If you don't think making $400k a year makes you rich, you're probably woefully out of touch.
Everyone is this tweet who things 400g is not rich is very out of touch with the real world and should try raising kids off of $21,000 a year
— Angie (@Angela_Twenty2) September 30, 2021
It's pretty easy to blow $400k a year if you live extravagantly in a big city.
"If you think $400k/yr is 'rich', you obviously have no idea how much it costs to live in a gated community, pay private school tuition for two kids, buy brand new cars for every member of a 4-person household, and fund four weeks worth of luxury vacations every year."
— Brad (@justsomebrad) September 30, 2021
The problem is a lot of people who are well off think they're barely scraping by because they also assume they need a 5 million dollar home, private school for the kids, country club membership, vacations twice a year, etc.
— Kurtsed Skeletton (@KurtisScaletta) September 30, 2021
I love the responses like “it's not rich if you live in a giant apartment in Bryant park and have two kids at NYU and a third who has braces. And have to pay for parking for your Audi suv." If you're living like that you are rich.
— Stavinchi (@StavinchiNY) September 30, 2021
On $400k a year, you're probably rich, but not wealthy.
Chris Rock had a bit about this years ago, the difference between rich and wealthy. He's rich, the guy that signs his checks is wealthy. Your tweet is spot on.
— Liz (@lizlamarca79) September 30, 2021
Some say that it matters where you live.
In just about every place of this country, earning $400K makes you very well off. In some areas, you'd be 'rich.' In others, you'd be doing very well. In Manhattan or San Francisco, you wouldn't be filthy rich, but you could make a decent go at it.
— 𝐅𝐢𝐞𝐫𝐜𝐞 𝐌𝐚𝐦𝐚 💛🐝 (@northeast_mama) September 30, 2021
In DC, no.
In NYC, hell no.
In Ohio, yes.
In Mississippi, hell yes.
— no name 🇺🇸🇺🇸🇺🇸 (@amanda_no) September 30, 2021
Depends on where you live. This house is for sale in Greater Boston. It's 251 square feet. It's on the market for $450k pic.twitter.com/8eA3rX7keN
— Joe Waters 😈😇 (@joewaters) October 1, 2021
It's all about how you manage your money.
My son and daughter-in-law earn over 400k together. They still rent a home, they buy used vehicles (nice used vehicles), they don't splurge except on my granddaughter and they go out to eat a lot. They use the rest of the money to invest/save. They are millionaires now 1/
— Roe V Wade IS the ballot! (@GLBRBR) October 1, 2021
I considered myself rich when I was making $200K in CA. It's rich. I literally had money I didn't know what to do with bc I don't waste $ living lavishly.
— Queen.Mary (@queenmaryresist) September 30, 2021
WARNING TRUTH BOMBS AHEAD.
Everyone in the US is rich. Even the "poor people" making $40k a year are 10x richer than most people on the planet and never go to bed hungry. But apparently, everyone in the US likes to say they're the poor class.
— Jessica (@JessVOTES) October 1, 2021
So what did we learn? The original poster says that $400K makes you "rich" but not "wealthy."
Reading the thousands of comments on this thread has been very interesting. There's no consensus answer to the question. I'm come down on the side of $400K makes you "rich" but not wealthy. Wealthy, to me, is not having to work anymore - your money does that for you.
— Chief Resistance Officer (@crushthebigots) October 1, 2021
in the end, it's not what you make, but what you keep. There are a lot of people who can't make ends meet making six figures and others who can do a lot with very little. It seems that the difference between both people is a sense of gratitude. Those who are grateful for what they have seemed to take better care of their money because they appreciate it. Whereas those who don't appreciate what they have feel compelled to spend and spend until they think they'll reach some mythical point of material happiness.
So, in the end, to be grateful is to be rich.
Oh yes, and be sure to tax the wealthy, whoever they may be.