Data on taxes

I pulled some data from the IRS today out of curiosity about some of the legends I'm hearing throughout the political discourse as well as an article I was reading the other day about the value of progressive income taxes. These graphs I threw together were pretty interesting to me. First, this shows the distribution of Adjusted Gross Income. Note that this is not income, it is stated income after deductions, exemptions, etc. Where do you stand? The guys on the right average $1.7M. Not bad.



This next chart shows the effective tax rate of these folks. So unless the guys at the right are incredibly good at adjusting their income, we really do follow a progressive tax scale and the poor lady down the block is not really paying more in taxes than the greedy Wall Street lawyer.



Finally, this last one shows how the top end of the population pays the taxes. The 1% of guys on the right pay 40% of the total tax bill while 50% of the population accounts for 10% of the tax. It's pretty clear why the Bush tax cut was a "tax cut for the rich" since there's no tax to cut for the poor, right? The way you cut taxes on the poor is through other taxes that disproportionately affect them (e.g., sales tax).



Probably worth noting that some of the Bush tax cuts weren't so much a tax cut as a tax correction, to try to adjust for taxes that currently create the wrong incentives in the economy such as double taxation on dividends. Does that cut taxes disproportionately for the rich? Probably, but it also creates the incentive for companies to pay out dividends again instead of using more and more debt. If you think dividends for those fixed income baby boomers are a good thing and corporate bankruptcy is a bad thing, you might just be a Bush tax cut fan after all!

Wanted - Someone Smarter than Me

During the first two weeks I was in South Africa I gleefully plowed through like five books, more than I'd read in a long, long time. Then I picked up The Brother Karamazov, a book that I'd been dying to read for a decade or two. Several people whom I admire greatly had recommended it highly as possibly the best fiction ever written.

A week or two ago I finally finished. Up until the very last page I was sure that the reason for their fascination would become clear. Nope. Didn't get it. I'm totally shallow. I read the entry on Wikipedia to see what I'd missed, thinking that maybe the 700 page book I read had been abridged down and stripped of the good part. Nope, that's what I read. And the really impactful parts were parts I'd read and thought were kinda good, but won't show up in any church talks anytime soon.

What's wrong with me? Someone tell me why this was such a gem? It's not that I hated it, but a book that takes me six months to get through is not worth writing home about (hmm, I guess I'm kinda writing home about it here...). It's not the pupu platter that A Catcher in the Rye was, but I won't be re-reading it either unless someone can convince me otherwise.

I need to go back to some pulse-racing pulp fiction or perhaps a nice warhater like Catch-22 or Slaughterhouse Five to restore my interest in reading I think. Everything else I've been reading is non-fiction which is generally a sure sign I'll be sleeping on the plane.

Problems with a Quote

I try to replace my quote from time to time just to keep things fresh even if I'm not posting. Problems are:
* No comments since it isn't a post
* Doesn't show up on readers

Kinda lame.

If my current quote doesn't convince you to give Chaim Potok a shot, I don't know what will. In the words of my good friend Anna Webb, "What we're really lacking in our church is a Mormon Chaim Potok."

I'm Real Busy

Feeling a bit TO'd that everyone's too busy to fit in a board game here and there.

Definition of recession

It feels like a recession doesn't it? High gas prices, high food prices, mortgage crises, the sagging American peso and low wage growth affect most all of us pretty directly. Recession is a vague term in a discipline that is rarely vague, but in general it describes a slump in economic activity, generally measured in real GDP growth. Strictly speaking, it should be at least two successive quarters of negative GDP growth. Quarterly GDP numbers were released yesterday and it is hard to see "recession" in this graph. I guess we need a different word to describe an economy that feels really bad, but is still growing just fine, and in fact appears to be on the mend.

A Dreaded Election

Once again it appears an election is approaching where I feel no excitement for any available candidate. I've tried to spend a few minutes here and there studying up on the parties and the issues.

Lately I've had the desire to really get at the heart of what exactly it means to be Republican or Democrat. I've been a bit disheartened by what I've found. I think I have a great deal in common with principles that seem to fall on either side and some that seem to be shared values, but their own websites do little to help me educate themselves. I expect vague - since that seems to be the way these things work, but it's more than that.

On the DNC website, rather than learn about what they believe in and the plan they have to change the mess we're in, I found that 80% of their pagespace is dedicated to vitriolic attacks on McCain. I'm no fan of McCain either, but tell me what YOU believe, not how you feel about McCain. I'm done falling for the common enemy argument.

I'm completely disenchanted by the RNC these days. Not only has Bush been an eight year massive disappointment, but the xenophobia Mitt Romney underwent bugged me a lot. I checked out their site today to see what they stand for. I found it interesting that they actually have a link entitled, "Mormons". Interested, I clicked to see if this was going to be a "Mormons should go to hell" link or a "Sorry we forgot we weren't in Salem, MA" link. Ironically, the link is broken. That kind of sums things up for me.

I feel like a certain 14 year old wandering from party to party with one saying, "Lo, here!" and the other saying "Lo, there!" I think I'll spend the next break I have looking into other parties. Maybe the libertarians are worth investigating.

Genealogy and Desi Rock

I think I'm in love.

A few years ago I started to fall in love with doing genealogy, or family history. The seed started to germinate while we lived in Sweden and Katie was able to find some of my ancestors and where they had lived. It grew a bit more when I started to interview my grandpa and record his experiences, including his time on the western front of WWII. He gave me all the letters he had written my grandma during the war and one of my most prized possessions is the final letter she wrote him before she could write no more before succumbing to ALS.

I have a world to explore on my dad's side since very little had been done on that side and I knew almost nothing about those roots. While we were living in Boise I started to do research on that side but kept coming up dry. Things just didn't seem to match and I never had enough time to really get immersed in it while chasing around our gang of kids and working on adoptions.

But now my cousin's wife (and now one of my personal heroines) has started to post all of the results of countless hours of investigative work she's done on my side of the family. I'm amazed at what she was able to accomplish. The names and dates won't mean much to you, but if you check out her blog you might see why this is such an addictive hobby for those that give it a shot. I can't wait to go visit Buena Vista, CO. Thanks Desi!

There's No Place Like Home

South Africans have been rising up against foreigners in the townships and the CBD in Joburg. Probably would not have affected us directly since it's about poor blacks, primarily from Zim, taking jobs and causing crime. Nevertheless, our quiet suburb will feel particularly peaceful at bedtime tonight. I really hope Trust is ok...

I Feel So Much Better

Mankiw has spared me the guilt of overpopulation. He wrote this ten years ago - it's about time I read it.

Thank Mint, I'm Rich!!!

As an old fart, I'm a little late getting to the online money management game. We've been Quicken users historically, which is just plain silly these days. With the prevalence of the web it is a no-brainer that my money management should be always-on, anywhere and tied into my online banking. I'm tired of entering receipts and categorizing the same transactions over and over. Fortunately there are pretty darn good solutions out there, and they are generally free or very cheap (by the way, the free ones appear better than the cheap ones from what I can see).

Even more fortunately, they appear to be handing out millions of dollars.

I've set up accounts today on Quicken online (sucks) and Mint just to see how they work and decide if I make the switch. My accounts and activity pulled into both of them perfectly. Except for the IRA I have recently set up at Chase. I haven't yet put any money in that - still need to sign some paperwork to transfer an IRA I have. But check out what Mint says I have in that account. Can anyone show me how I make a transfer to Switzerland or the Cayman Islands from this screen?

The Familial Engine

I get paid to spend time thinking about other people's business models and how they spend their money - how to grow their top line, decrease their costs, increase the bottom line, and how to spend that bottom line.

Sometimes I'm so busy thinking about other people's money I have little time to think about my own. In fact, I'm ashamed to say that I haven't truly balanced a checkbook since we left for Africa - too many moving parts and Quicken on a computer in a storage unit.

Lately I've given a fair amount of thought to our family's business model, which isn't much different from anyone else's. I envision our business model like a large funnel sitting over a sink with four holes. We pour my income into the top each month (at least what Uncle Sam allows me to pour - there's a decent leak in that pipe). We then run our family month to month, paying the mortgage, food, etc. The liquid that runs out the bottom of the funnel is what's left after we're done. For some, no money runs out. In fact, some have to throw a bit of extra liquid in the top off of credit cards just to make ends meet. *knocks on wood*

We then get to choose which sinkhole to let those meager drippings enter.
1) We can buy something we've really, really wanted, like a new board game or plasma TV.
2) We can give it to someone that really needs it a lot more than we do (feel free to paypal me if I'm that certain someone for you)
3) We can save it for later - retirement, college or a rainy day.
4) This is going to sound like #3, but I keep it separate - we can build assets with it. When you build assets in #3, you invest in a 401k or whatever. In #4, you invest to try to move your life toward working your assets off, instead of what most of us work off. You try to make a living less by the hour or the month and live on the golf course while you're lemonade stand pays the bills. (for more detail, read Rich Dad, Poor Dad - I haven't read it but know this is what it's about)

The nice part about numbers three and four is that the sink has storage containers under those holes - it doesn't hit the sewer unless you sell corn (another story). You could say #2 is a container as well - what comes around goes around. If you follow the pipe under #1, you usually find the end of the pipe either in my game closet, a garage sale or the DI.

I'm not proud about the drippings out of my funnel. I'm also not proud of where those drippings fall. I think where you put your drippings, and how voluminous they are will vary over time. It's fairly irresponsible to give away everything and not have something for a rainy day. It's fairly boring to not spend on some things you've really, really wanted. But here are three parting thoughts, two from C.S. Lewis and finally one of my own (I couldn't find my favorite from C.S. Lewis that says that our charity should force us to live below those with similar means):

"I do not believe one can settle how much we ought to give. I am afraid the only safe rule is to give more than we can spare..."

"Nothing that you have not given away will ever be really yours."

"At the last day I believe we won't be asked how much we chose to share; we'll be asked how much we chose to keep."

She Prefers a Nice Firm Mattress

Lucy's got her first real bed when we got to Dallas. Before that she spent most of life in a portacrib of some sort due to our wanderings. Now she gets to sleep in a big girl bunk bed with Madi. But she doesn't seem to like that.

Even if we put her to bed asleep, every morning we wake up to find her sleeping on the floor, usually not far from her bed. This isn't because she falls out of bed - she has a safety rail. She gets out and finds a particularly uncomfortable spot, without a blanket. This is where I found her this morning - at the top of the stairs. Scary. Falling out of bed is one thing; falling out down the stairs is another.

Everyone Needs a Little Place They Can Call Home

Mukesh Ambani is building a place for his family - a wife and three kids - in Mumbai. A humble abode of 400,000 square feet, 27 stories high. It will cost about $2B. And to think I feel guilty about my house knowing that there are starving kids in India! Kids, I guess you don't have to eat your vegetables after all.