President Biden has set a clear threshold for what he considers “wealthy” in the United States. According to him, anyone earning $400,000 or more annually should be subject to higher taxes. Biden has argued that individuals in this income bracket can afford to contribute more to help fund social programs and address economic challenges exacerbated by the pandemic.
In various speeches, Biden has emphasized that his proposed tax hikes would only affect those making above $400,000, with no additional taxes for those earning less. CNBC’s analysis confirms that Biden’s plan aligns with this statement, with only those who experience a windfall that pushes them above the $400,000 mark facing potential tax increases.
Biden’s definition of wealth contrasts with that of his former boss, Barack Obama, who sought to impose higher taxes on those making $250,000 or more during his presidency.
At first glance, $400,000 seems like a substantial income compared to the average American salary. People in this income bracket make up roughly 1.8% of taxpayers and collectively earn about 25% of the nation's income.
However, some argue that $400,000 may not stretch as far in high-cost areas like Manhattan or San Francisco. For context, the average household income in Manhattan is around $138,000, making $400,000 a relatively high income even in such a pricey city—assuming it isn’t squandered on extravagances.
On Twitter, user Chief Resistance Officer posed the question of whether an annual income of $400,000 qualifies as “rich,” sparking a lively debate. Many respondents agreed that earning $400,000 typically signifies wealth, though they noted that poor financial management could lead to living paycheck-to-paycheck despite such a high income.
Some commenters emphasized that the perception of wealth depends on location. For instance, $400,000 can afford a comfortable lifestyle almost anywhere in the country, but in cities with exceptionally high living costs, it might not translate to being “filthy rich.”
Others stressed the importance of money management. One commenter shared that their family, despite earning over $400,000, avoids excessive spending, rents their home, and saves and invests wisely, ultimately achieving significant financial success.
The consensus from the discussion appears to be that while $400,000 may classify someone as “rich,” true wealth involves more than just income—it includes how well one manages their finances and maintains a sense of gratitude. Those who are grateful and prudent with their money often fare better, while those who are not may find themselves perpetually dissatisfied, no matter their income.
Ultimately, the debate underscores that wealth is not solely defined by how much one earns but by how effectively one manages and appreciates their resources. And yes, the discussion on fair taxation of the wealthy continues to be a significant topic in this context.