The Middle Class Wealth Myth: Why You Feel Left Behind

Let's start with a simple question.

When the heck did tracking middle-class wealth even become a thing in the United States? Why does it even matter? But when? What's the cause of this? Why? Why is this being forced on us? Why is this shaping our perspective of self-worth? And whether or not our kids are going to have a better life than us and whether or not we can retire and all this other stuff.

So the answer to that is we have to rewind the clock.

In your head, think of a year when maybe this would have come to fruition, when tracking middle class wealth could have originated.

1913.

If you had 1913, you win.

If you had 1913, you know what happened in 1913.

If you live in a high tax state where they're talking about taxing these wealth taxes and this probably really resonates with you.

1913 is when the federal income tax was created.

In 1913, when the federal income tax was created, it wasn't anywhere like what it is today, but it kind of opened the floodgates.

for this ever-increasing tax burden that we have to deal with.

In the 30s and 40s, researchers, because they need something to do, they started publishing early income distribution statistics.

So basically, they were using that IRS data from 1913 on to start to make assumptions.

Now, again, keep in mind, not everybody's filing taxes at that time, but they're doing it anyway.

They're coming up with statistics.

We're going to use that in the future here as we get further into the episode.

After World War II, the policymakers, they shift their focus to what they call consumer stability, which makes sense.

You've got all the social policies from FDR coming out.

You've got Social Security, that kind of stuff.

You've got the politics of we'll give people Social Security, you'll give us votes.

We did some episodes on Social Security and where they came from and how that impacted people.

But all of a sudden, we're talking about things like homeownership.

We're talking about debt.

We're talking about retirement security.

And all of a sudden, we're doing consumer finance surveys.