Income isn’t perfect but it’s used for a reason. Think about the problems inherent in defining “wealth”. It’s too squishy a concept to use for policy reasons, or else they would. Is somebody who makes seven figures but spends it all on food, entertainment and travel really poor? No.
Except wealth is used for lots of policy. For example, financial aid at schools attempts to use wealth. Which is why they take into account equity in your home.
And if you have ten million in a trust and no income — are you poor?
I’m saying it’s not useful in policy as measurement of poverty. Poverty is and forever will be defined by income. Wealth is used in policy like everything else, yes of course. Tax policy is a great example. Is there anything that tax policy doesn’t have loopholes and special provisions for? I’d argue that wealthy people benefit from all that. Poor people benefit from clear and effective policies that use simpler, less game-able constructs. Getting into the business of trying to define nebulous hard to define constructs like wealth will benefit those with greater resources, always.
Let's say that the terms of a trust dictate that interest revenue be immediately paid out to a specific charity, but you are allowed to spend the principal. Are you poor?
