The House defines middle class households as those with a taxable
income of less than $90,000. The Senate defines it as households with taxable
income of less than $77,400. Add the $24,000 standard deduction to determine
total income. Congress defines middle class as those with household incomes
from $0 to $100,000. This is a lower and middle income tax cut. The loss of the
Personal Exemption deduction is significant if you have 2 or more children or
other dependents.
Those single taxpayers who earn less than $35,000 a year do not earn
enough to live on their own unless they live in a very low cost rural area in a
low cost state.
Some number crunching will tell you that in “normal” cost of living
areas, it takes a gross salary of $35,000 a year to be able to pay basic bills
and allow a single taxpayer to live on their own. If they live in a big city, where costs are
higher, it requires a higher salary, probably at least $50,000.
Those who are married with both partners working can leverage their
$35,000 salaries into $70,000. This also works with roommates. If they live in the “exurbs”, they may be
able to purchase a house.
Household incomes at $100,000 are huge in rural areas, comfortable in
suburbs and “middle class” in big expensive cities.
Household incomes at $150,000 offer families the ability to have income
beyond their basic living expenses. This excess is typically used to build
retirement income and keep homes maintained and upgraded.
If being “middle class” includes the ability to purchase a house, then
$70,000 to $150,000 might be a good range.
The Senate plan taxes household taxable incomes from $77,400 to
$140,000 at 22% and taxable incomes from $19050 to $77,400 at 12%, so obviously
they consider household incomes below $77,400 as middle class. The House thinks
middle class is $24,000 to $90,000. Both plans are consistent with including
the $50,000 to $60,000 median household income number as the midpoint of their
designation.
House Plan Senate
Plan
12% $24,000 to $90,000 $19,050 to $77,400
22% $77,400
to $140,000
Internet searches yielded old, partial, conflicting and unhelpful data.
I had to use a more direct approach to understanding what Congress is actually
doing. Some of these websites are
flagged below:
Pew Research has several postings that attempt to describe the middle
class, but these are by state and none are current as of 2017. See below:
http://www.businessinsider.com/middle-class-in-every-us-state-2015-4
"Middle
class" is a tricky concept. Depending on where you live, you can feel
middle class earning as much as $250,000 a
year — about five times the US median income of $52,250 from the same time period. In this analysis, Pew
defined middle class households as those earning 67%-200% of a state's median
income. Apr 2, 2015
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