Max Boot: Are Millionaires All They’re Cracked Up to Be?

In trying to pay for the Democrats’ grandiose health-care plan, President Obama has endorsed the concept of a “millionaires’ surtax.” Leave aside for a moment the consideration that not even this would raise the revenues necessary to pay for the Democrats’ designs; they will be forced to increase taxes on those earning considerably less than $1 million a year. Still, it’s clear why they’ve focused on milking millionaires as the way to fund their plans. Millionaires are seen as the symbols of excess — far removed from the “middle class” to which all politicians pay obeisance. Surely they can afford to pay more, the president and his supporters no doubt figure.

But are millionaires all they’re cracked up to be? The term was coined in the 19th century. The Oxford English Dictionary credits Lord Byron with inventing it in 1816 (”He is still worth at least 50-000 pounds being what is called here [sc. Evian] a ‘Millionaire’ that is in Francs & such Lilliputian coinage”). At the time, a million pounds (or even a million francs) was a vast sum. This was a time when the average English worker earned less than 55 pounds a year. (Today the average full-time worker in the United Kingdom takes home almost 25,000 pounds a year.) But times change, and a million pounds ain’t what it used to be. Neither is a million dollars.

Comparisons of monetary value over the centuries are necessarily inexact because there are many different yardsticks one can use, and it’s hard to account for changing standards of living. But employing this handy website, my research associate, Rick Bennet, calculated that a million pounds in 1830 would be worth 73 million pounds today (or $120 million). A million dollars from 1830 is worth $24 million today. (That’s based on the Consumer Price Index. Utilizing other measurements, today’s dollar equivalent is even higher.)

If only someone had been clever enough to coin a term for today’s truly wealthy — those who make $120 million a year, or at least $24 million. Not that they should be hit with more taxes either. But at least if we’re going to talk about “the rich,” let’s talk about those who are wealthy in today’s terms rather than employing a metric that is 200 years out of date.