Over the same period, the share of qualifying households as a percentage of US households leapt to 13.0%, from 1.6%. This dramatic increase suggests that financial thresholds have become overly inclusive, allowing individuals to qualify even if they cannot fend for themselves.
On the positive side, the amended definition would open a new avenue for knowledgeable and experienced investors to qualify. But by failing to adjust the financial thresholds, the amendments would lock in place weakened investor protections. More calibration is needed to strike the right balance.
According to the proposing release, adjusting the $200,000 income test for inflation would result in a $520,000 threshold, while adjusting the $300,000 joint income test from 1988 dollars to 2019 dollars would require a joint income of $632,000.
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