From DAILY FINANCE:
This is not a good time to be rich in America. This country has always had a love/hate relationship with its wealthiest citizens, and the financial hardships of the Great Recession have only broadened the chasm between the rich and the poor. Today, with millions struggling to pay the mortgage or fill the gas tank, the small wealthy fraction who have reaped the rewards of an exploding real estate bubble and rising gas prices have become especially reviled.
The trouble is, while everybody knows that “the rich” are the enemy, it’s hard to determine where exactly the line lies between hard-working, salt-of-the-earth members of the middle class and parasitical, bloated plutocrats who are feasting on a struggling economy. Part of the problem lies with America’s famed egalitarianism. In a country that prides itself on social mobility, the idea of a clearly-defined upper class seems somehow inappropriate. For that matter, with financial insecurity leaching its way into even the wealthiest households, few people are comfortable describing themselves as rich…
One way of dividing the rich from the middle class is through the top tax rate. Ever since the Sixteenth Amendment instituted a permanent income tax in 1913, America’s highest earners have paid its highest tax percentage. While the top rates were mainly designed to bring in extra money, they had the side effect of setting a standard of wealth. This role was particularly clear at the end of World War II, when the highest bracket — 94% — effectively created a salary cap. Anyone making more than $250,000 was basically giving the top slice of their earnings to the government…
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