According to Ron Lieber, a NY Times columnist, under the new tax agreement reached by the Congress, individual taxpayers earning $250,000 or more and married taxpayers earning $350,000 should be prepared to pay higher taxes (http://www.cnbc.com/id/100351003).
During their election campaigns, both President Obama and candidate Mitt Romney used the $250,000 amount as their “middle class” cut-off when discussing their tax/deficit-reduction proposals. And that $250,000 cut-off seems to have held, despite President Obama pushing for tax increases for those “above $1 million”, after the election.
This proposed cut-off begs the question, what is a proper middle-class cut-off amount and what would one define the $250,000 level proposed by the Congress in its tax/deficit-reduction agreement.
Well, according to the data collected by the Census Bureau (www.census.gov), the median inflation-adjusted income for 2011 for all households was about $50,000. That amount takes into consideration about 115,000 U.S. households.
For the same period, median income for families was $61,000, which considers about 75 million U.S. families. Included in that category are: Married couple families ($75,000 in median income) and single-parent only families ($41,200 for male-only parent families and $30,000 for female-only parent families).
In an article discussing President Obama and Governor Romney’s election proposals, Catherine Rampell used data from the Tax Policy Center in reaching a similar conclusion regarding the income definition of “middle-class” (http://economix.blogs.nytimes.com/2012/09/14/defining-middle-class/). In her article, Ms. Rampell points out that “households earning $250,000 fall somewhere just above the 96th percentile.”
From the perspectives above, Congress’s tax/deficit-reduction agreement is aimed at the affluent, rather than the middle class.