Tag Archives: net worth

The Upper Middle Class Is Coasting Downhill With The Wind At Their Back

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According to the Wall Street Journal’s interpretation of the Fed’s Survey of Consumer Finances.

The gist of it:

“Rather than being left behind as all the gains in the economy accrue to billionaires, they have in fact seen bigger wealth gains over the past three years than the top 10% of families. Indeed, the biggest wealth gains between 2019 and 2022 were among the approximately 13 million families in the 80th to 90th percentile of the income distribution. Their median wealth jumped 69% from 2019, adjusted for inflation, to $747,000 in 2022.”

They note, “. . . the increase in net worth for these families has far outpaced inflation.” 

They conclude:

“Rather than being swallowed by the 1%, the economy, according to these numbers, is creating a growing upper middle class. Many people got there by pursuing college degrees, steadily building retirement accounts and purchasing homes. For the most part, they became wealthy slowly, and were well-positioned when pandemic-era stimulus programs boosted asset values.”

As a result of inheriting some of their families’ growing assets, their children may very well end upper middle class too. Especially if they’re college educated.

The unreported on story of course, is the utter lack of social mobility for the other 80%, many of whom are not college graduates. Historically, the default mindset in the (dis)United States has been an assumption that each generation would enjoy a higher quality of life. Now, understandably, parents worry that their young adult children will not enjoy their level of economic security.

Most Americans Support Warren’s ‘Ultramillionare Tax’

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The title of a FiveThirtyEight feature:

“Sixty-three percent of Americans believe ‘upper income people’ pay too little in taxes, according to a new survey from Morning Consult. The poll also found that 61 percent of Americans either “strongly” or “somewhat” favor 2020 Democratic presidential candidate Elizabeth Warren’s tax plan, which would levy a new tax on households with a net worth of $50 million or more.”

More generally:

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Fund those Roth IRAs friends, like the ocean surface, taxes are going to rise.

“Warren’s tax plan has been described as an “ultramillionare tax” that aims to make the rich pay taxes on accumulated wealth. It would place a 2 percent tax on households whose net worth exceeds $50 million and then an additional 1 percent (so 3 percent total) on those worth more than $1 billion. The plan has faced some criticism, including claims that it’s unconstitutional. Interestingly, however, the support for the plan appears to be somewhat bipartisan, according to the Morning Consult poll: 74 percent of Democrats and 50 percent of Republicans said they strongly or somewhat favor the proposal.”

However, as Paul Sullivan explains here, Warren’s proposal will be very difficult to implement. Just to be safe though, I’m going to do everything in my power to keep my net worth under $50m.

Semi-related. As those who know me even a little can attest, I’ve done a lot of stupid things in my 56 years, but I’ve never threatened the world’s richest person with legal action. That’s next-level stupid.