[quote=CONCHO]Being rich and having a large income are two different things.[/quote]
[quote=pri_dk]Try explaining that to the IRS.[/quote]
I’m with Concho on this. If you have wealth – you can spend that… and typically your “income” is taxed as capital gains.
Vs someone who has a high income – but spends it all – it’s taxed as income (higher rates).
A person can inherit wealth (not earned by them) and earn modest income. They are wealthy, but they are not a top earner. And if they are a poor investor, they may not generate any income off of the wealth.
Look at Mitt Romney – he’s rich by all standards (270M?) But apparently pays taxes at about a 15% rate. And he claims to be unemployed… although his 370k/year in speaking fees is not insignificant.
Someone making $500k/year in salary pays a higher tax rate than someone earning $500k off of investments. There is a difference.
High income and wealth may overlap, but they are not the same thing.
