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What’s Rich?

- August 17, 2008

Last night, Rick Warren asked both Barack Obama and John McCain to define the income level that makes someone rich. Neither candidate gave a precise answer. Obama pointed out that families making under $150,000 would benefit from his tax plan, while McCain offered up the absurd figure of $5 million dollars.

This is actually an interesting question since there is widespread confusion (particularly in the media) about the distribution of income in the United States. Here are the facts according to the Census Bureau:

–In 2006, the median household income was $48,201. That means half of all households made less than this amount and half made more.

–For family households, the median was just shy of $60,000. For married couples households, the median was $69,716.

–Households making over $133,000 were in the 90th percentile.Households making over $174,000 were in the 95th percentile. This means that Obama’s line of $150,000 probably hits the top 7-8 percent of household incomes.

–The data on those making above McCain’s line of $5 million dollars aren’t readily available, but those making over $1.6 million are in the top 0.1 percentile (that’s the top one-tenth of one percent). Overall, there are only 146,000 households making over $1.5 million and only 11,000 with incomes over $5.5 million.