So, What’s Middle-Class Income These Days

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 (

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 (, 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” (  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.

About docjonz

I am an Associate Professor of accounting at Hofstra University in Hempstead, NY. Additionally, I have more than 30 years of professional accounting experience in various capacities including auditing, accounting standard setting and corporate accounting policy.
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