PERCEPTIONS OF RICHNESS
By Simon Briscoe 2010-02-23

How much would your total annual family income have to be for you to consider yourself rich? The median response in a recent US survey was $250,000 (about £160,000) – that is, half of the respondents gave a figure above $250,000 and half below. There was some bunching of opinion, so the most frequently mentioned figure fell in the range around $100,000. That's just over double the US median annual household income of about $45,000.

Perhaps the survey's most revealing conclusion is that, as our graphic shows, the median income at which people say they would feel rich is roughly double their actual income, pretty much regardless of income level. Proof, at one level, that more money is unlikely to be enough – whatever you earn, “rich” is out of reach.

When we hear the cry of “tax the rich!”, then, what does it mean? Judging by the survey, supporters of the policy mean for it to apply to people earning significantly more than they do. This is detached from reality: if we were to use official figures and arbitrarily define the rich as the top 5 per cent of household incomes, the threshold would be $160,000, nearly $100,000 short of the survey's median response.

The survey did not quote the mean income considered necessary to qualify as rich. It is too heavily influenced by extreme values – a few people gave their responses in billions.

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