commissioner.org
| Source | Jim Devine |
| Date | 10/09/21/19:42 |
| raghu wrote:
>> what income level can be justifiably considered rich? One way to deal with this issue more objectively is to define the "rich" as "independently wealthy," which I would define as owning enough net worth to earn an average income in a given society. Let's do some seat-of-the-pants (not enough time to get it right) estimates: the minimum wealth needed to be defined as wealthy = (the average income)/(interest rate). If we use the median per-person income for the US in 2008, this indicates that the poorest rich person owned about $691,000 in net worth; if we use the (mean) per capita real income during the same period, a rich person would have to have owned about $911,000 in net worth. For a family of four, multiply these by four, etc. Someone with better access to data can calculate what percentage of the US population would count as rich from these. I used the interest rate on tax-free municipal bonds (4.8%, to correct for the role of taxes) and ignored the role of inflation (which was very low in 2008). |
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