On Being Rich-ish: Lessons I learned becoming suddenly middle-class
residentcontrarian.com
residentcontrarian.com
But even now that I'm making good money, it boggles my mind how richer everyone else still seems. Like, how do so many young people have a favorite island in Hawaii? How is everyone out there affording new cars? People actually picked a college major without thinking about cost?
One thing I have to constantly wrap my head around is that being broke doesn't correlate to income. I have a family and a mortgage and savings and nothing left over for luxuries at the end of the month. But someone working as a bartender can afford a new Jeep and go to Vegas 4x a year because they have a good roommate situation and they are due to inherit their parent's second house one day.
The reality is that oftentimes they simply can't, at least according to a responsible definition of "afford".
All we see from the outside is the brand new Jeep, we don't see the fact that they're underwater on a 72 month loan with 6% interest. The average car loan term in 2019 was 69 months, that's insane. Something like 30% of trade ins have negative equity.
Even ignoring debt, I've spoken to a surprising number of people who make great money and live lavishly but have effectively no retirement savings. The level of financial literacy in the US is abysmal.
https://dqydj.com/household-income-percentile-calculator/ https://dqydj.com/average-median-top-net-worth-percentiles-b...
Why would you take out the house? For most people that's a key part of their retirement.
Going into retirement as a renter or with a $500k home paid outright is one of the biggest difference makers.
I do see how knowing what your liquid net worth is has some value, but knowing your expenses has value, too.
Note: I own my home outright. I bought it in 2000, before the real estate bubble really took off, had a 15 year mortgage, paid it off early.
I wouldn’t discount it entirely, but home equity should clearly be evaluated differently than cash in the bank.
I think a better explanation is small inheritances. I think there are a number of people that have come into small inheritances. Enough to change their situation but not enough to move out of their social circles and because of that they’re very unlikely to let you know.
Say someone gets $500k from their uncle. Not a small sum of money but not a gigantic inheritance. You’re not going to immediately retire if you get that but you might pay off your mortgage. Now ask yourself what your lifestyle might be if someone came along and wiped out your mortgage. Now that Jeep or Audi might not be such a big deal and your looking at them thinking, “how on earth can they be doing that? They’re working the same job I am and I can’t do that”.
Could you please clarify what this means. E.g., A car "X" is traded in for a car "Y". X gets a trade-in-value of $2,000. That is, the cost to buy Y is reduced by 2,000. Where does the negative-equity in your point apply here please? Thanks.
The dealership gives me 10k, but it still has a 12k loan on it. So on top of the cost of the new car, I am still out $2k.
Even now, married 20 years, the author talks about the burden on his wife and kids if he went back to being poor - I'm sure my wife would just leave if I was genuinely stuck in a poverty cycle with no way of getting out, and I wouldn't really blame her.
It’s completely rational for women to place a high value on men’s income. The vast majority of people want kids someday. From the perspective of women, that means they need to either find a man with a good job that can support a family, find one who truly can take on half the caregiving and half the bread winning, or can truly take over the domestic role. The number of men who, if they’re not out earning money, can instead have the kids bathed, homework done, and dinner on the table for when the woman gets home from work are vanishingly small. Great stay at home dads exist, but they’re unicorns. Statistically, they are vastly outnumbered by the number of guys who leave the mother of their children to do both the bread winning and caregiving. Thus as a purely rational matter, it makes complete sense for women to seek out men who can at least fulfill the traditional male gender role.
I'm suppose if I was properly rich and flaunted it, certain women would suddenly be interested, but no person I'd marry.
This worldview is limiting, even insulting, to both men and women though and you should try not having it.
My wife wouldn't and no woman in a relationship I know would care about this either.
Love is not based on income.
That sounds tremendous depressing.
A partnership is teamwork not two doing different things.
Your comment doesn’t really seem to be trying to substantiate your claim, so much as it’s trying to paint a picture of how depressing his description of reality is. From that, I’m pretty confident you’re trying to define some ideal definition of love – which, if he’s correct, would not be ‘wrong’ but would simply not be common in the real world – while he’s trying to factually describe the motivations for human relationships in the real world.
(I’m not sure I quite agree with his gloomy picture, but I don’t think you are even coming at it with the same intent.)
In my relationship and in my marriage it's not me who is poor it's us. Or it's us who have money.
And neither of us would leave each other because of money.
And the sentiment his comment convays is at least also not reflected in relationships around me.
Lots of people have very different situations from what they project (witting or unwittingly), they might be running up debt to pay for their lifestyle or maybe they have profitable small side businesses, and bartend for the bills and social aspect.
Focus on your journey, and where you are on the path, don't get distracted with people "passing" you on shorter, longer, or completely different paths.
In the case of the bartender, this wasn't actually a hypothetical: I have more than one friend in this exact situation - they got one good inheritance, are waiting on another, and in the meantime live rent free at a parent's property. In both instances they even get aid from the state.
While they appear poor on paper (and they often describe themselves as poor), they have tremendous resources at their disposal.
What I've observed:
1) They're not saving for retirement. $0.
2) They spend a lot using credit. New vehicles with 2k down and high monthly payments. High monthly credit card bills.
3) They have a lot of stuff but are essentially living pay cheque to pay cheque. One thing that surprised me was working at a company that got acquired and payroll got moved to the parent company which had a pay schedule that was 1 week later, so they told us we would get paid one week later than we had historically. Inconvenient, but no problem for me. Out of an office of about 40 people 15 said they wouldn't be able to pay their bills. These were all people who made over 6 figures.
Another thing I've noticed is that many people don't look at absolute price but instead look at monthly payment, I think raising interest rates are going to hurt a lot of people that from the outside seem to have a dream life.
Comparing finances to others without actually having all the information isn’t worthwhile.
I feel like we don't count our own responsible expenses but double count other people's luxury expenses.
A new jeep is maybe 6k/yr. A trip to Vegas is maybe 1k. That's maybe a total 12k/yr
If you're mortgage is 3k a month and he's paying 500 a month in rent, you throw in two kids @ $1,000 a month and maybe 500/month in savings and you're looking at 66k in expenses which dwarfs the 12k.
It would be a real bummer if civilization collapses and it would all be for nothing, but otherwise I hope to FIRE in a few years...
The most difficult thing these days, is my kids. I'm extremely happy that they don't know how bad things can be, but I get extremely worried by that too. I get worried, that they don't try hard enough because they don't understand how bad things in life can get. I get worried that they are far too trusting because times are so good and plentiful.
Life can change good or bad in an instant.
i grew up poor, with a single parent, on social welfare (because the parent could not work since they had to stay home to take care of us kids until we were older)
in germany.
social welfare paid our rent and gave us enough money that we could afford everything we needed. (we didn't need a car, and we didn't have a tv, but that was by choice. they would probably have paid the tv, had we wanted one). i never felt any struggle. when i moved out from home, i never needed money from my parents either. always paid my own way. i was never rich. i just learned to live frugal. and i am not at all scared of being poor again, because i know that there is a social net that i have access to if i need it.
At best you are mid-upper lower class. If you have any worry about being able to get along if you lost your job and had a major life-threatening illness, you are still lower class like the rest of us.
I've noticed folks sometimes fall into the trap of trying to give their kids nothing to teach them lessons. Early help in life has compounding effects.
You would be worried nonetheless, because your brain will latch on to the next anxiety. Just like you thought that having 5 years of expenses would alleviate your anxiety. What you need is a good therapist to work on your anxiety issues.
Therapy or meditation, likely both may help induce a shift. As the grip loosens you will find many things begin to change.
"Sleeping well at night", is likely the single most important thing you can focus on. If you choose to focus on that, it likely will permeate many aspects of your life..
You may find a deeper and more authentic experience and through that you may find that you actually have won the lottery. You are safe. You have 5 years of expenses - I guarantee you that you could figure out solutions to just about anything that comes your way in 5 years.
You're no longer trying to survive. It's now time to learn how to live.
I'm afraid there's simply no amount of money that can possibly remove the feeling that everything could collapse at any moment. If your sense of security is predicated on continuing to possess money, you will always be vulnerable to the fear of losing it, no matter how much you accrue.
If you won the lottery tomorrow, what makes you think you wouldn't worry about losing that money too?
I thought about that recently when I went to the grocery store - when I was fresh out of college, making ~$30k/year, I remember always going to the grocery store and keeping a running total in my head of how much I was spending so I didn't go over $70, since I knew my debit card would be declined if I did. Now I don't even pay attention to how much individual items cost - I just grab what I need.
I remember being much more frustrated by friends trying to drag me out to eat at restaurants or throwing away food. Like, one sit down meal was worth three days of groceries!
It was not easy I rarely ate meat and only cheap meat at that. I still felt lucky as it was a temporary thing.
Typically, this is how I measured my success as well: when I stopped looking at the prices of things and just shopped or ordered what I wanted without too much concern. (Within reason of course, because as a former cook when I want splurge it can easily hit 4 digits.)
Everything else never felt as a re-assuring,; I've bought lots of cars and motorcycles, signed leases, traveled etc... over the years, but nothing made me more comfortable than knowing that the food bill wasn't going to ruin my finances for the month(s) as it used to before.
I used to live on $100/month for food during university, it's partly why I decided to work in kitchens and I know I can stretch out a meal quite a lot and not lose on quality. And if it's just me, I tend to like simple meals that I can iterate upon: a ragu can turn into about 5 different dishes and all uses cheap(er) cuts of meat.
But I still remember having to wait to buy things from grocery stores like yogurts or juice or pasta only when they were on special (loss leaders) and it's actually how I got a pretty good at understanding the market dynamics of a food supply's value chain, which helped when I ran kitchens and when I got into supply chain.
It ultimately culminates in focusing my cuisine on farm to tables because eating in-season not only tastes the best, is more environmental, but when you're in charge of food costs in menu development you can achieve ROIs and ARRs to justify larger expenses by buying and sourcing from farms who you can count on for price breaks for other items/prioritization for other items by buying their entire harvest ahead of planting.
As both a former farmer and chef, this was a huge relief and allows you to utilize capital where it's needed most without taking as many loans for repairs, labour, training, expansion etc...
Not a complaint.
> There’s something that people with money say that doesn’t make sense: that regardless of how much money you have, you run out of it just as soon.
This is just a weird thing to me. I didn't feel this was true on a five digit salary much less what I have now.
This was relatable. While never having to support a family of 4 on 35k, I did have a period of my life where I was very broke on my own. When I finally started to climb out of my situation, I remember thinking people were idiots for putting money in a 401k. You can’t get it out if you need it. It took 5 years of stable employment before I actually started putting money into a 401k.
The freaking idea that money makes problems go away is so powerful.
That's basically what I noticed as I get less poor.
Automobile problems...pay for it. Medical problems...pay for it. Did you get a parking ticket? Pay it. Now you don't have to worry about being towed.
America really crushes the poor in many respects.
If the poor had other options, like Job corps, or a sharecropper type situation where they can stay rent free and learn skills.... that would be one thing. But there's nothing available to poor people other than to just fucking be poor or get lucky...and getting lucky seems like a rediculous way to build a society.
Then you combine that with massive offshoring and automation..... It makes you realize capitalism is kind of bullshit if there's 7 billion people in the world willing to do the job.
It's a total clown world.
On the other hand, you might have a CEO proudly drinks cheap beer and wears Kirkland Signature workboots to the office.
Sorry but it doesn’t go both ways.
At one point, he did have a car he got on discount because of hail damage. That's pretty ratty in my opinion.
Seriously? It happens all the time. Lots of very wealthy people get into the habit of penny-pinching to the extreme and "hiding" their wealth from everyone else.
If you can afford to live in one of these neighborhoods, you are already middle class.
Middle-class pressures, back when there was one, meant you were expected to get a new car every year. There were reasons for that, back then: tetraethyl lead additives in the gasoline destroyed engines in no time. But it was not a big drain on middle-class people, just an expense to keep up with.
"They" have been very, very good at convincing lower-class people they are now middle class. It worked! Fully half the voting population imagines, when they think they are voting to keep their own money away out of the poors' hands, really are voting to keep extreme rich peoples' money in the rich peoples' hands, along with most of what could have been the voters' money, besides.
They have got so good at it, people actually elected an out-and-out confidence grifter to the Presidency, and helped stage a coup attempt to keep him there.
I think, rather than "they" convincing people, that you have made up a definition of "middle class" that exists only in your own mind. It doesn't correspond to either the real world or to the definition that the rest of us are using.
They’re usually people working trades in the mid-west, but they own a nice house, have cars, and savings in the bank.
It’s still possible. But it seems like few people are interested in those careers or living in those locations any more. Usually because neither is prestigious enough.
If everyone wants an office job that pays enough to live in a trendy HCOL coastal city - yeah, a single income with high school only won’t cut it.
A wage-earner could be comfortably lower middle class. A professional could be upper-middle.
This is something that folks that came from The Other Side of the Tracks have. I came from there. People my age have grandparents (or, in some cases, parents) that lived through The Great Depression, and they have this, writ large.
I still basically live pretty low on the hog, even though it is not necessary. This recession is an annoyance; not a disaster. I lost more money, earlier this year, than many folks make all year. It sucks, and I'm not wealthy enough to "shrug it off," but I am not existentially terrified. I know that things will be OK in a couple of years, and I'm not in danger of burning my principal before things start recovering.
I loved his previous article, and I'm glad he's doing better.
This is something practically everybody in the US has. They are right to be terrified. The overwhelming majority of us are one life-threatening illness away from homelessness.
You might be surprised. It is a valid fear, and I suspect folks that are older, and have families, may feel that way, but a lot of highly-paid, young professionals don't seem to understand that.
You will see this in action, as more and more tech companies start laying off their engineers.
I started off very humbly, and am constantly around folks that don't have a pot to piss in (and some of them used to be millionaires).
They imagine they are well-paid, but their fraction of company revenue is small enough that, all added up, it leaves enough to make the C-suiters billionaires.
Many of them will begin to learn, soon.
I did what was necessary - learned to cook, worked odd jobs, moved around frequently to find cheap accommodation, slept on all sorts of beddings and, sometimes, on the street, abstained from luxuries and travel etc - during this time.
Then, last year, I found a sweet gig and my income suddenly rose way beyond my expectations (around $6,000 per month). That was also the time I moved to a new apartment. I spent some of the new money on furnishings and living a comfortable life - not thinking twice about splurging on a meal or clothing. I invested in the stock market and opened an IRA account.
At the back of my mind, however, there was a nagging feeling that it wouldn't last. Sure enough, I lost the gig in February this year and am surviving on IRA money and credit cards. I forgot to cash out of the stock market near the top and suffered losses of almost $3,000. I am loathe to move out of my current place though I have a feeling I will have to, eventually. I am back to cooking all my meals and thinking twice before making purchases.
I am not sure if it is a cycle but poverty is definitely a mindset. I've been on the other side where I was making decent money that allowed me to live comfortably (not ostentatiously). I was in a better mental state. Lately, I have been pretty depressed (although things are not as bad as they were in 2014) and exhausted all the time.
The savings from that alone could help you with future bills and living should you not be fortunate enough to find another good paying gig quickly.
Just two cents from someone who's been there.
I'm rooting for you and hope it turns out even better.
As 2-D from Gorillaz would say 'It'll be alright, in the end. And if it's not alright, it's not the end.'
When you are middle class, it’s lower middle class, middle class and upper middle class. Only the UMC has being rich aspirations/possibilities.
Getting decent pay is just so much more efficient at making you economically safe than any kind of clever frugality is. Maybe if you could figure out a way to live without paying rent or mortgage interest, it'd be worth it, but otherwise it's the income side that matters more than the expenses side.
Importantly: you can always make it back.
In a capitalist system the top 10% will always be richer and the bottom 10% will always struggle. And this would still be true even if a magic genie came a long and made everyone ten times smarter.
This isn't a knock on capitalism. Capitalism scales where many other systems don't. (I'm looking at you communism.)
Comparing Sweden as an opposing choice to Capitalism doesn't make any sense.
Any free day I was trying to get better at programming on college library computers I was able to use by copying other peoples student IDs off sign in sheets.
I made maybe $1500 a month which barely covered food, gas, and helping out people even poorer than me while trying to slowly save for a vehicle that could make a cross country trip to somewhere with other work options.
I eventually got a $1000 vehicle that only needed weekly repair, used it to relocate to a more populated area, upgraded to an abandoned trailer with borrowed electricity and no septic, and got a retail job.
Now I had more time to build tech skills. Eventually got the confidence to take on contract coding jobs, and then the confidence to do that full time.
Eventually I knew enough to pass interviews and get a salaried software engineering role. Then another. Turns out there was plenty of demand for some of the skills developed along the way doing random coding and infosec gigs, managing cheap DIY servers for thousands of users of random open source side projects of mine, and building custom Linux kernels for whatever random old hardware I could find.
Worked my from software engineering roles into running security departments for a series of well known companies by finding major security bugs at every employer. Turns out security is one of those things everyone seems to think is someone else's job, so I always made it mine.
Now I own a home and have a family in Silicon Valley. I own a security consulting company where my team and I have several audit projects and retainer contracts at any given time helping major companies spot security flaws, and build defenses.
Going from homeless to the comfort I currently enjoy was a long road. I never fully shake the fear I could lose it all and be back on the streets at any time. That is only amplified now that others depend on me. I never took 401ks because I expect life or the institutions will fail me before I ever see it back. Never 100% trust banks because I worry funds will be stolen via identity theft or go negative into overdraft hell I can never pay back, no matter how high the balance. I always have the need to have multiple income sources so no single one of them drying up can sink me. The need to learn new skills constantly so I always deliver results most others cannot so people keep paying me. The need to prep for every worst case scenario I can think of always for myself and those that pay me.
In the end, I think this pressure of always feeling a bit chased has served me well and still does. I also do not know that I would recommend this path to anyone, but I am generally pretty happy these days so I will take it.
I also always noticed a pattern that when people start drinking when they are poor or depressed, they seem to get stuck in that place. I decided I would reward myself with the option of moderated vices only after I was in a reasonably stable, sustainable, and happy place in life and career. I was on my own with nothing at 17 and celebrated my success with my first drink at 25 when I felt like I earned it.
YMMV. I am not a mental health professional.
"A king is but a foolish labourer / Who wastes his blood to be another’s dream" (Yeats)
"As a capitalist, he is only capital personified. His soul is the soul of capital." (Marx)
This extends to not wanting to discuss salary with coworkers, by the way. The common conception is the bosses want to hold us down so they tell us not to talk about it. But I’ve been in multiple situations where I didn’t want to.
I knew I was making more, and it wasn’t because i was the best- in some cases I was lucky, sometimes I just negotiated better. But in either case there’s really no upside to disclosing.
In general, there would be more upward pressure on wages if information asymmetry went away. It's especially insidious for folks in the lower class, since they don't realize the extent to which they are being underpaid.
>But in either case there’s really no upside to disclosing.
There certainly is upside to discussing for anyone earning less than median. But as you write, as long as everyone thinks they are earning more than the median, individually they have no upside.
Obviously, everyone cannot be earning more than median, but more importantly, price transparency shows the movement of supply and demand curves, across industries and even across businesses in the same industry.
It is impossibly hard for most people not in the upper class in the US to conceive of just how impossibly far they are from that upper class. $100k/yr? Lower class. $200k/yr? Still lower class: you still can't afford to send your kids through college, and still make your house and car payments, replacing your car every year or two. Yes, that was what middle-class people used to do.
What happened to the middle class? It was eliminated, by explicit political policy. The US income curve is now strongly bi-modal. One hump for upper class, another for lower. Very few people are near the middle, where the middle class once was. Those few are either tacking to get to the upper class, probably futilely, or are well on their way out of it, and won't be back.
The Republican Party discovered that they could get lower-class people to vote against their own interests, and for the interests of the upper class, by convincing them they were not lower class. Now half the country votes mainly to try to keep the desperately poor from taking what they have managed to scrabble together, and in the process ensure the extremely rich get extremely richer and don't have to pay for anything, and especially not let any of it go to those same voters.
Up until around 1970, Americans' income was on a relentless rise. That had stopped by 1980, and has been more or less level, since. The income didn't go away, at all. The total amount has skyrocketed, since, going up at the same rate as before. Just, rich people get all of the difference, everything from that line down to the flat line describing what they have left for the rest of us. All this is policy, and the program to get there was spelled out in the Powell Memorandum, which you can read online.
During COVID lockdown and supply-chain upsets, they got insanely more money, somehow, again at the rest of our expense.
Where is this halcyon universe where the median (or even the 75th percentile) American:
* Paid for their children to go to college
* Bought a new car every other year
'Cause that doesn't resemble any point in the past century of the universe we currently inhabit.
Evidence? Because I don't think the US income distribution looks like this at all.
[Edit: Oh, you've got your own definition of "middle", which is completely different from what everyone else in this conversation is using. With your definition of "middle", I could see there not being many people there. I still don't think the distribution is bi-modal, though.]
OP is just making stuff up arbitrarily
But I remember an America that still had a middle class. It wasn't like this.
My father grew up on a farm, upper middle class. He carried around a roll of $100 bills, and once bought an airplane on the spot, out of it (plus the motorcycle he rode up on). By the time I went to college, we were mid-lower middle, and I worked my way through (took 7 years), but there still was one.
> It wasn't like this.
I kind of have to agree with you here. I think three things made a huge difference: The breakup of the extended family, the rise in medical costs, and the rise in college costs. And, maybe, the failure of the pre-college education system to prepare people for the workforce (or even for adult life).
But the 50s through 70s were a golden time, at least in the US. Everyone else was rebuilding, and we had all the industry, and so we had a ton of jobs. But it wasn't always like that.
My father was born in 1930. He tells about having to re-use thread, not because they didn't have money to buy thread, but because the thread factories had closed. They didn't know when (if ever) it was going to be different. That was the first eight years of his life. So... it wasn't always like the 50s, either.
Then they hire PR experts to trick people. Very, very successfully, as you can see in this thread.
People really cling to the idea that they are doing well, and always compare their status to those further down, as they have been trained to do. Most cannot conceive of how life is for the actual upper class, or even what it would be for somebody truly middle class, if there still were any.
An individual income of $200k put your firmly in the top 10% of income earners in the US.
But the claim is they are lower class?
This seems really disconnected with reality. I’m not sure you understand what life is like for the average American.
Upper class is what they call the 1%. Most of us are among the other 99%.
An average American is indeed saddled by a healthcare system distorted by misaligned incentives (tax-free benefits), tons of regulation and government ineptitude, corporate lobbyists abusing regulation and government ineptitude, and self-serving unions (AMA). However, the probabilistic impact of medical bills is basically non-existent on an average American. This is kinda like car crashes vs plane crashes - one is actually a cause for concern, the other makes good news stories.
The biggest difference between median and average, for Americans, is the amount of whining - while a median American seems pretty ok, the average is driven up by super-whiners who tend to either live in a crappy, expensive city for no reason; have a useless humanities degree; or think that luxury is a human right. Or some combination of the three :)
Sweden, e.g., is much less rich, but its regular citizens get a decent cut. So they are mostly a little better off than the typical American.
That word "whining" is an effective trick. It distracts attention very conveniently.
Tax burden in Sweden is much higher for middle class. I mean it looks like my wife, who is a school teacher in the US, would be taxed at marginal 53%, not counting the VAT of 25%, that is insane. That sure is a "decent cut", just not the right way ;)
What exactly does this "decent cut" translate into?
Perhaps American can use their wildly higher incomes to buy more things that they actually want.
If you’re making $200k per year you’re richer than 90% of Americans who globally are some of the wealthiest in the world.
Claiming someone making $200k is “lower class” comes across as self-pity and a complete lack of perspective.
This is a complete delusion designed to justify affluent people asserting they’re “middle class.” Americans never lived like that. Back in the 1960s and 1970s, most people didn’t even go to college. They lived in a house with half the square footage, but more people in the household. If they got cancer, they just died.
The problem isn’t republicans, or not just republicans. The problem is that Democrats also refuse to raise taxes on the top 25% above the current Reagan-era lows. Every other developed economy functions by heavily taxing the top 25%. Even in the US, that group earns the plurality of income. What makes the American tax structure unusual isn’t the absence of wealth taxes or low capital gains or corporate tax rates. It’s incredibly low tax rates on upper middle class people. What makes America unusual is that affluent professionals identify as beleaguered members of the “bottom 99%” instead of acknowledging that they are the people that must be taxed to pay for the social services they claim to want.
You know why many Americans are on the edge of medical bankruptcy? It’s not because we don’t have wealth taxes on billionaires. Sweden doesn’t have that either. Neither does Germany or France or Spain or Italy. The reason is because of the incredibly low taxes paid by Facebook engineers, doctors, lawyers, and other white collar professionals. My au pair paid about the same tax rate in Germany, with an entry level desk job (40%) as my double private practice lawyer household in Maryland. That’s because the second to highest tax rate (42% versus the top 45%) kicks in at the equivalent of $70,000/year. In Sweden, the top tax rate kicks in at 1.5x the median income (under $100,000 in the US).
It’s nothing to do with the tax rate, and entirely to do with the insane insurance system that does not even try to keep costs reasonable. The UK gets this correct with the same tax rates (when you include property tax) as the US.
Also, the UK does not have similar taxes to the US: https://www.oecd.org/tax/revenue-statistics-united-states.pd.... US taxes, at all levels, are 25.5% of GDP. UK is 32.8%. And those taxes in the UK fall much more heavily on the middle class. That's partly because the brackets are tighter (the 40% rate kicks in at 50,000 pounds, and the top rate of 45% kicks in at only 150,000 pounds). But also because a huge fraction of revenues is from the 20% VAT.
The majority of the difference is we spend so much more on healthcare than other countries. If we spent what other countries did on healthcare we'd be pretty close to being able to afford Medicare for all with current government spending on healthcare.
In most of the country, $200k is not middle class indeed - it's "rich".
Real /median/ household income is still on "relentless rise": https://fred.stlouisfed.org/series/MEHOINUSA672N
Middle class "shrinking": https://www.aei.org/wp-content/uploads/2018/01/middleclass1....
To counter other left-wing delusions implied in this post, housing-to-income ratio is long-term almost flat, until the recent inflation: https://www.longtermtrends.net/home-price-median-annual-inco... I am not sure if they adjust by size, as median house size has also increased by a lot over this time; if they don't it understates the modestly of the housing price increases.
Government spending as %% of GDP is constantly growing, or at most flat in good times: https://fred.stlouisfed.org/series/FYONGDA188S
And social services as %% of that are growing, too: https://www.pewresearch.org/fact-tank/2017/04/04/what-does-t...
Like most capitalist societies historically, the US still has a middle class (petit bourgeoisie.)
Like most capitalist societies, this class is fairly small (not as small as the upper class, the haut bourgeoisie, though), generally high-income group, defined by relying on a mix of labor and capital income, both being important (or applying their own labor, rather than overwhelmingly rented labor, to their own capital.)
The idea of a middle-income “middle class“ was always a lie to divide the working class and protect both upper classes against them.
That prosperity continued, to a height unimaginable at the time. But their children and now grandchildren get a constantly decreasing share of it.