Is $250,000 a Year Really 'Middle-Income'?

By Derek Thompson

In an interview with ABC, Mitt Romney offered his definition of the middle class. "Middle income is $200,000 to $250,000 and less," he said.*

Who knows what "middle class" really means. It's more of a feeling than a statistical definition. But as a matter of arithmetic, it doesn't make much sense to think of people earning $200,000 as being in the middle of anything, except the top decile of earners. Using data from the Tax Policy Center 2012 projected distribution, here's a look at the share of American tax units that make less than $200,000. The big blue slice is Romney's definition of middle class, which in all fairness to him, is more or less shared by the White House.

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There are lots of ways to measure household income, like market income before taxes or total income after taxes and government transfers, and so on. It doesn't make much of a difference. If you make $200,000, you are, essentially, the 5%. A $200,000 salary will go a lot further in North Dakota than in Manhattan, of course, but it doesn't change the overall distribution.

You could argue that Romney's middle class definition shows that he doesn't understand average people in a country where the typical household earns about $50,000. Or you could argue that Romney's broad definition of middle income is harmless because it just means his promises to the "middle class" extend up to $250,000. I'm not arguing either point. But to call $200,000 "middle income" begs the question: Middle of what, exactly?

Update: Extremely fair point raised by the first commenter: The president's tax plan, which has been described as preserving tax cuts "for the middle class," also uses the $200,000/$250,000 cutoff. Although I haven't seen the president refer to people making $200,000 as "middle class" or "middle income," it is reasonable to argue that his policy makes the point implicitly.

This article available online at:

http://www.theatlantic.com/business/archive/2012/09/is-250-000-a-year-really-middle-income/262402/