Rich Americans Have No Idea How Rich They Are

Posted by Cord Jefferson

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We've told you before that Americans are horribly misinformed about who has money and where the United States sends its money, but now it seems that many Americans are even misinformed about how much money they themselves have. For evidence, see a new Gallup poll about Americans' views on taxes, released online yesterday.

This first chart shows people's views on the fairness of their personal tax bills. As you can see, more than two-thirds of people in the wealthiest bracket believe their taxes are too high, with only six percent believing they're getting off easy. The wealthy were also more likely than everyone else to say that they were taxed an "unfair" amount.

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This next chart is more interesting, especially in light of the one above. In this one, we get to see people's views on what their fellow countrymen pay in taxes.

While it is notable that the vast majority of Americans believe "upper-income people" pay too little in taxes—more ammo against extending the Bush tax cuts for millionaires—even more notable is that a full 30 percent of households making more than $250,000 annually believe upper-income people are taxed too little. Compare that to the six percent in the chart above and you see what why is so fascinating.

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There's a disparity here. Only 6 percent of people making $250,000 say their own taxes are too low, but 30 percent of people making $250,000 say that "upper-income people" pay too little in taxes. That suggests that a large number of people making $250,000 don't think of themselves as being "upper-income people."

The bottom line is that many wealthy people have simply no idea how wealthy they are relative to the rest of Americans. Chalk that up partially to a consumer culture that was for years defined by living outside of one's means. Thus, even rich people found themselves struggling to pay bills when the economy went south. Catherine Rampell at the New York Times also theorizes it's the "Middle Kingdom effect": "[P]eople 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."

The end result is a blind giant of an upper class—a thing that wields large amounts of wealth and power while also believing that it deserves even more.