Defining 'rich' before the fiscal cliff deadline
NASCAR cars and trucks on display outside of the Florida Governors' Mansion during the NASCAR at Florida Governor's Mansion reception on June 29, 2011 in Tallahassee, Fla.
President Obama made a new offer to the Republicans yesterday in the fiscal cliff negotiations. The President said he’ll extend Bush era tax cuts for households making less than $400,000, he’d previously drawn the line at $250,000.
So is $400,000 the new rich?
“In a sense the president is redefining what’s rich and it goes back to -- rich to an economist is wealth,” said Chris Low, the Chief Economist at FTN financial.
By wealth Low means how many assets you have. But in in politics these days, wealth has been defined by income and that can get complicated.
“It’s kind of like this: if you’re living in Peoria, making 200 a year chances are you’re a senior executive in one of the manufacturing companies there and you’re doing really well,” Low said.
And if you live in New York, Chicago or San Francisco?
“Chances are you’re a professional, you’re a doctor, you might be a lawyer. The cost of living is higher -- with a couple of kids, it’s a struggle,” said Low.
Low said there’s not a lot of people who make $400,000 a year. But if you do, Low said, most people would agree, you’re rich.