An interesting little bit of info from Catherine Rampell at the New York Times Economix blog. A recent poll in the U.S. found that people making over $250,000 a year appear to be a bit confused either about math or how well-off other people are relative to them.
When they were asked whether their taxes were too high, just right or too low, 67% answered too high and only 6% answered too low. You’d think that when later asked whether upper-class people pay too much, too little or their fair share of taxed, their answers should match the answer from the previous question. After all, if 67% of upper-class people think their taxes are too high, you’d expect that around 67% of them to say that upper-class people pay too much in taxes. You think that but you’d be wrong.
Suddenly the proportion of upper-class people who think that the upper-class is paying too little in taxes goes up by a factor of 5 to 30% and the proportion of upper-class people who think the upper-class pays too much in taxes goes down by almost half to 38%.
Rampell has an elegant explanation called the “Middle Kingdom” effect:
Everyone thinks they’re middle-class partly because of cultural reasons, and also partly because of the way the income distribution is skewed. The greatest income inequality is at the very top. As a result, people who are rich but not the richest — in the $250,000 zone, say — see they have more than lots of poor people, but also much less than a few very visibly rich people. Then they conclude they’re in the middle, so they must be middle class.
I think a similar phenomenon might exist on a global scale as well. It’s easy to get locked into an idea which class you’re in based on where you live but try out this Global Rich List which tells you, based on your income, where you rank in terms of wealth among the 7 billion people on this planet. It’s crude but it’s a rough estimate. Apparently I’m richer than over 6 billion people and I’m a student living off work as a research assistant and a stipend.
I wonder how people’s values might change, both in the context of the American upper-class and globally, if we had a better idea where we stand relative to everyone else. Maybe that’s part of the reason I’ve heard (with, of course, no sources to back this up) that the easiest way to be happy is to move to an area where you’re slightly better off than everyone else.
A surprisingly topical song: