Are you rich if you earn £70,000? According to the Labour MP John McDonnell, you are. And that contention made some people very angry.
In an interview on the Today programme (from 1:15:30) on BBC Radio 4, McDonnell set out his vision of a “fair taxation system”. He said Labour would be “looking to the corporations and to the rich to pay their share”.
When pressed to define who the rich are, McDonnell put a figure on it: “We believe … the rich will be above £70,000 to £80,000 a year and that’s roughly defined as what people feel is an earning whereby people feel they can pay more.”
Twitter quickly took up the question of whether or not people earning more than this were rich. Unsurprisingly opinions diverged wildly.
The reality is that relatively few people earn more than £70,000 a year. Data from HMRC shows that just over 5% of taxpayers earned at least this amount in 2014-15.
This compares to a quarter of UK taxpayers (25.2%) who earned between £20,000 and £30,000, slightly more than a fifth (21.5%) earning between £30,000 and £50,000 and just under a fifth (19.8%) in the £15,000 to £20,000 bracket.
Taken together those earning between £15,000 and £50,000 made up two-thirds of UK taxpayers.
Given that such a relatively small number of people earn £70,000 or more, some have asked: why don’t these people realise they are rich?
One answer might be in a 2011 Joseph Rowntree Foundation study on class, which found that, regardless of their actual earnings, people tend to think their earnings are somewhere in the middle of income distribution.
“For most of the participants in our discussion groups, it is people ‘like them’ whom they perceive to be in the broad ‘middle’ of the income spectrum, who seem to be undergoing a particularly difficult time,” the study found.
