Here's a question you're likely to hear whenever this subject of taxes comes up.

Do the rich pay their fair share?

There are two parts of this question.

Who is rich?

And what is fair?

Let's start with who is rich.

Nearly everyone assumes that a person who is among the top 10% of all income earners

qualifies as rich.

But according to 2011 data, a top 10% household makes around $150,000 or above

gross annual income.

That's income before deductions and taxes.

Now, $150,000 is a nice living, but it certainly doesn't make you rich.

Okay then.

What about the top 5%?

You get into this percentile if your household makes around $190,000 or above.

That's a nice bump, but it hardly puts you in the rich category.

How about the top 1%?

That's $500,000 or above.

A great income.

But remember, most people only get to that level after many years of hard work and quite possibly

the accumulation of serious debt to fund their education or build their business.

Of course, there are people who make more than $500,000, and there are some who make many millions, even billions.

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