1. a lawyer who works 100 hours/week flirting with a heart attack and earns $480,930
2. a small business owner who sells their plumbing co after 4 decades and earns $480,930 from the sale, but never broke six figures before
3. a retiree who sits on the couch 24/7 and earns $480,930 in passive dividends
4. a professional of some kind who works 20 hours/week in a low stress job and earns $480,930
The press likes to talk about these data points, and it's valuable information, but ultimately income tells a very small piece of the story. Source of income, job security, cost of living, and quality of life all matter a lot too.
Seriously though, I think I might know of some semi-retired lawyers who make that sort of money, but that only happens after a lifetime of option #1.
Edit: you could make this kind of money with very little work as a board member of a large corporation. Once again, see option #1 for how to get to that point in your life.
Of course one could argue making a determination if someone has cancer is not low stress.
They were all owners of lifestyle businesses that had been running for a while. They either hired a full time manager to manage the business, or everything basically ran on autopilot and required less attention.
Some of them got their by working their butt off, some got there by inheriting the business and never really having to work all that hard.
For better or worse, taxes are applied differently to different kinds of income in the US.
There may be other pieces but income is a very large one. Change the incomes of those people to $15,000 and we would see very large differences in their lives.
The average tax rate for the top 2% is higher than for the top 3%. That is as it should be, if you believe in progressive taxation.
It's higher again for the top 1%, and higher again for the top 0.1%.
But then it's lower for the top 0.01%, and lower again for the top 0.001%.
In fact, the average tax rate is lower for the top 0.001% than it is for the top 3%.
In 2015.
> What’s disturbing about the data is that the number of investors claiming tax-exempt interest -- the municipal market’s constituency, if you will, is falling, after reaching a peak of almost 6.5 million in 2008.
The likely reason is that muni bonds aren't competitive with ordinary treasury bonds for people in lower tax brackets due to market pressure from investors in high tax brackets. So they make sense for fewer people and rational lower income investors move away from them.
A common Silicon Valley working couple, 10+ years into their careers are likely to be in the 1% if you roll in things like bonuses and stock/option grants.
And at the same time you have people claiming to be middle class with incomes over $250K.
Lower, middle, upper-middle, upper class, etc do not map (as much as news media tries) to income levels. Middle class does not identify a level of income.
To identify income levels use quintiles instead.
Middle class is a social class and annual income has no causal effect on social class.
https://archive.nytimes.com/www.nytimes.com/packages/html/ne...
Index funds?
Also, keep in mind those very top people are likely not at the top that long. As someone else pointed out, those could be people that sold their company.
If you owned stock in a public corporation, you'd be smarted to sell it over time to reduce the tax impact.
In theory, the market cap of the company is the current value of all future returns.
For now actual billionaires don't agree with your statement.