Most agree on break for middle class, but who's a member is taxing in itself

January 28, 1992|By Tom Bowman | Tom Bowman,Sun Staff Correspondent

If you're a member of the middle class -- and you probably think you are -- Congress, President Bush and the presidential candidates have two words for you: tax cut.

"Sounds great," you say. But are you really a member of the middle class?

To the folks at Shirley's Restaurant & Bar, a corner tavern in the heart of Curtis Bay in South Baltimore, that's an easy question. The waitress says the middle class begins somewhere in the $20,000 range and ends at $28,000 for a single earner. Her boss says the middle class stops at the $50,000 mark for a family.

Ask the lawyer descending the escalator at The Gallery, the glass citadel of fountains and boutiques at the Inner Harbor. The middle class, he says, is family income below $200,000.

America is no longer the melting pot. It is the middle-class pot.

Only in Washington are there more definitions of "middle class" than can be found at Shirley's or The Gallery, as influential politicians try to court this elusive and long-suffering herd of voters.

Among the variety of bills offering the tax cuts is the Middle Class Tax Relief and Fairness Act of 1992 from Illinois Democrat Dan Rostenkowski, chairman of the House Ways and Means Committee. The measure would offer the greatest amount of tax relief to those families earning below $50,000.

Meanwhile, the Tax Fairness and Savings Incentive Act from Texas Democrat Lloyd Bentsen, chairman of the Senate Finance Committee, reserves the biggest tax cuts to those who make more than $50,000.

And the Economic Growth, Investment and Job Creation Act from House Minority Whip Newt Gingrich, R-Ga., would reserve the bulk of its package to those making more than $100,000, according to analyses of the plans by the Citizens for Tax Justice and the Center on Budget and Policy Priorities, two liberal-leaning groups that monitor tax policy.

Sen. Paul S. Sarbanes, D-Md., also introduced an economic recovery package earlier this month that includes a middle-class tax cut, but he did not define "middle class" in his bill.

Any tax cut must be part of an overall package that addresses health and education costs, Mr. Sarbanes said, and should apply to those taxpayers who experienced a "contraction" during the 1980s.

The senator pointed to a study by the congressional Joint Economic Committee that showed that families earning more than $63,000 saw their gross income increased by 15 percent during the last decade. But families earning less than $35,000 experienced stagnation.

At the other end of Pennsylvania Avenue, President Bush is reportedly considering middle-class tax cuts for families earning more than $50,000.

The U.S. Census Bureau says the 1990 median income for a family (two or more people related by blood) is $35,353, meaning 50 percent of Americans earn less and 50 percent earn more.

But there is no clear definition of how much money it takes to enter or leave the middle class.

"It's much more of a political definition than an economic one," says Peter Sepp, spokesman for the National Taxpayers Union, a non-profit group working for lower taxes.

"Ninety-nine percent of the people in this country think they're middle class," says Paul Merski, director of fiscal affairs at the Tax Foundation, a non-profit research group, "because of a high threshold of earning before you can call yourself rich."

And where does the middle-class end? Two earners with two kids "pushing $100,000," he says, which would then become "upper middle income."

David Keating, executive vice president of the National Taxpayers Union, thinks middle class ranges between $20,000 and $100,000 for a family income.

But the 49-year-old attorney at The Gallery thinks that's too low.

"I would say under $200,000," said the Baltimore County man, who together with his wife makes just under $200,000. "But we have four kids," he quickly adds.

And where does the middle class begin? "Starting about $40,000," he says.

A vice president at a brokerage firm from Havre de Grace said a middle-class family earns between $80,000 and $100,000. For a family earning between $30,000 and $50,000, he had another definition: "I'd say lower class."

Offering tax relief to those earning under $50,000 doesn't make much sense, the lawyer adds, arguing those making over $100,000 will spend the money and give the economy the jolt it needs.

To Shirley's owner George Burck, 47, who makes just under $30,000 and considers himself solidly middle class, tax proposals like Mr. Rostenkowski's make sense.

"If [the tax cut's for] anything above $50,000 a year, it's a joke," he said. "I don't know many people making over $50,000."

"A lot of people have heard about [the tax proposals]," he said. lot of people know they're not for them." He believes most of the cuts will be reserved for those families making over $100,000, a figure that "definitely is not middle class."

Rep. Benjamin L. Cardin, D-Md.-3rd, a member of the tax-writing Ways and Means Committee, is a supporter of the Rostenkowski measure, which would raise taxes on single taxpayers who earn more than $85,000 and couples with income over $145,000.

Mr. Cardin said relief should be given to those families with salaries ranging from $25,000 to $100,000. "It's that income bracket that's been hit the hardest," he said.

Sen. Barbara A. Mikulski, D-Md., supports the Bentsen measure. "Middle-class families," she said, "are those struggling every day to put food on the table, buy clothes for their children, pay the mortgage and save every dime in the hopes of sending Jane and Johnny to college."

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