I listen to a lot of radio. In this political season, you hear a lot about tax rates for "wealthy" Americans. "Wealthy" Americans seems to be defined as couples who make more than 200K per year.
My pet peeve is that yearly income isn't the same as wealth. Wealth is your net worth. I'm sure there's a strong correlation between income and net worth, but they're NOT the same thing.
If one family's yearly income is 100K. And a family down the road makes 50K per year, and another family down the road makes 200K per year, which one is wealthiest? It's impossible to know. The wealthiest family is the one with the greatest net worth.
It may very well be that the 65 year old couple who earned 50K per year, and saved every penny that they could are wealthier than the 30 somethings that gross 200K per year, and spend nearly all of it.
My point has nothing to do with tax policy, and which household should pay a greater marginal rate. It's the mis-use of the term "wealth" when discussing marginal rates on the news.
A minor pet peeve
December 16th, 2011 at 09:25 pm
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Jerry