I've had a poll running on my blog for the last week asking people what the upper limit is on the middle class. It would be interesting to graph people's responses against their income. A mentor of mine has said that "rich" simply means 10x more than I currently make, whatever that may be.
The median of my statistically insignificant poll was $150K and the mean was $235K (such graphs always skew right. Here are a few stats for you:
* 80% of Americans define themselves as middle class (effectively everyone)
* 4% of Americans define themselves as upper class
* 67% of Englishmen define themselves as working class (lower class - effectively everyone)
Statistically, the true middle (median) in the US is $42K. The question is how far above that median can still be called "middle". If you want to call the middle the middle three quintiles of income, that would be $91K. Leaving only 5% at the top, the upper limit would be $166K.
My readership seems to believe (like most Americans) that while their children are all above average, their income is modest and should be much greater, but for now we'll be contentedly middle class. I'm with you.
Friday, October 31, 2008
Sunday, October 26, 2008
Tax summary
Greg Mankiw's summary of the candidates' tax plans. At a 93% effective marginal tax, why do we push for that extra $1? Sobering analysis.
Saturday, October 25, 2008
Thursday, October 23, 2008
Wednesday, October 22, 2008
For the lawyers
Google Analytics says that "Lawyer" is the second most common profession of readers of my blog, right after "Immediate Family Members". I came across this graph and thought you'd enjoy it. This is the distribution of starting incomes of lawyers. Most starting income graphs are bell-shaped. Interesting how bimodal this one is. Any ideas on which mode is associated with which political party?
Apologies for the size.
Apologies for the size.
Monday, October 20, 2008
Tension of Principles and Tolerance
I found this editorial by George Will very interesting about the decline of the Episcopal church in America. In particular, his conclusion struck me as poignant:
As the church's doctrines have become more elastic, the church has contracted. It celebrates an "inclusiveness" that includes fewer and fewer members.
It is an interesting principle to consider - how can one effectively abide by principles he believes in in a way that does not demean or alienate those that see the world differently, while not diluting institutions that advocate those principles to the point of irrelevance. This seems to me to be one of the primary contemporary challenges of churches, political parties and other philosophical vehicles.
As the church's doctrines have become more elastic, the church has contracted. It celebrates an "inclusiveness" that includes fewer and fewer members.
It is an interesting principle to consider - how can one effectively abide by principles he believes in in a way that does not demean or alienate those that see the world differently, while not diluting institutions that advocate those principles to the point of irrelevance. This seems to me to be one of the primary contemporary challenges of churches, political parties and other philosophical vehicles.
Friday, October 17, 2008
Thursday, October 16, 2008
Monday, October 06, 2008
What Milan looks like on business
Good thing the $ is strengthening against the Euro. That means these are only $680.
Friday, October 03, 2008
Interesting tax facts
As you consider next month's vote and gouge your eyes out trying to decipher fact, fiction, hyperbole and lie in these horrible debates, here are a few things I've learned recently and found interesting:
1) Under either candidate, 43-44% of tax filings would result in zero tax liability. To be clear, this does not mean they get a refund - it means they would pay absolutely zero income tax. Currently this number is 33%, up from a historic norm of 21%. Hard to cut taxes on the poor when 44% of those filing returns don't pay them.
a) Implication #1 - Tax policy and social policy have comingled to an enormous degree. Over a third of all people have no sense for the cost of government. It used to be that people would pay taxes and then receive checks for programs - these might net out. Now they net out pre-tax, which means fewer checks to cut but also means income tax is not meaningful for most. The irony is the perception that cutting taxes on the poor will stimulate the economy or substantially help the poor. Not really so.
b) Implication #2 - Federal tax revenue is now far more unpredictable and volatile since it is now more reliant on taxation of the wealthy, which is harder to predict - large returns are frequently dependent upon one time events (capital gains realization) or broader economic conditions. As the economy staggers, tax revenue plummets.
2) Housing is the most subsidized industry by tax revenue, to try to make sure everyone can afford a home. Are we seeing the downside of trying to make sure everyone owns a home, even if they can't afford it?
3) In 2006, Exxon Mobil had earnings of $39.5B, which has made it a target for the windfall tax advocates. That's a lot of money, huh? We should tax these guys more heavily? How much did they pay in taxes in 2006, by the way? $27.9B. Hmmm. That's a pretty high % already isn't it? That's more tax that 50% of taxpayers paid collectively in 2006. As I've noted before, their earnings are about 10%, which is about the same as many good companies, including GE, which Obama would like to not tax, but subsidize, as they invest in more green energy (which Exxon Mobil's also doing).
4) 4 out of 5 Americans consider themselves middle class. Now you know why politicians talk about cutting taxes for the middle class. Oh, 2% of Americans consider themselves upper class.
5) The highest income tax bracket isn't all that high by historic standards. It was 94% during WWII and 91% for many years thereafter. Who brought it down the levels we're acquainted with? A famous Democrat named JFK.
Editorial: Biden hit a nerve with me last night in the veep debate (just one). The word I've been trained and then sensitized to avoid is "fair". Usually when someone says something isn't fair, it just means they don't like it. I have six kids and hear it all the time. It doesn't describe the problem, it simply applies a person's judgment on whether they find it favorable. In Biden's, he said that increasing taxes on the wealthy to decrease taxes on the middle class is fair, not redistribution. By definition, obviously, it is redistribution - increasing taxes on one group of income earners so you can lower it on another group is inherently a policy of redistribution (see: Robin Hood). Whether redistribution is desirable or not is arguable, whether it is "fair" is hard for me to understand. If it is "fair" that we need greater wealth redistribution, facilitated by the tax code, my next question would be - when is it fair enough? Remember this graph that I've showed before? How steep should this slope be before it feels fair enough?
1) Under either candidate, 43-44% of tax filings would result in zero tax liability. To be clear, this does not mean they get a refund - it means they would pay absolutely zero income tax. Currently this number is 33%, up from a historic norm of 21%. Hard to cut taxes on the poor when 44% of those filing returns don't pay them.
a) Implication #1 - Tax policy and social policy have comingled to an enormous degree. Over a third of all people have no sense for the cost of government. It used to be that people would pay taxes and then receive checks for programs - these might net out. Now they net out pre-tax, which means fewer checks to cut but also means income tax is not meaningful for most. The irony is the perception that cutting taxes on the poor will stimulate the economy or substantially help the poor. Not really so.
b) Implication #2 - Federal tax revenue is now far more unpredictable and volatile since it is now more reliant on taxation of the wealthy, which is harder to predict - large returns are frequently dependent upon one time events (capital gains realization) or broader economic conditions. As the economy staggers, tax revenue plummets.
2) Housing is the most subsidized industry by tax revenue, to try to make sure everyone can afford a home. Are we seeing the downside of trying to make sure everyone owns a home, even if they can't afford it?
3) In 2006, Exxon Mobil had earnings of $39.5B, which has made it a target for the windfall tax advocates. That's a lot of money, huh? We should tax these guys more heavily? How much did they pay in taxes in 2006, by the way? $27.9B. Hmmm. That's a pretty high % already isn't it? That's more tax that 50% of taxpayers paid collectively in 2006. As I've noted before, their earnings are about 10%, which is about the same as many good companies, including GE, which Obama would like to not tax, but subsidize, as they invest in more green energy (which Exxon Mobil's also doing).
4) 4 out of 5 Americans consider themselves middle class. Now you know why politicians talk about cutting taxes for the middle class. Oh, 2% of Americans consider themselves upper class.
5) The highest income tax bracket isn't all that high by historic standards. It was 94% during WWII and 91% for many years thereafter. Who brought it down the levels we're acquainted with? A famous Democrat named JFK.
Editorial: Biden hit a nerve with me last night in the veep debate (just one). The word I've been trained and then sensitized to avoid is "fair". Usually when someone says something isn't fair, it just means they don't like it. I have six kids and hear it all the time. It doesn't describe the problem, it simply applies a person's judgment on whether they find it favorable. In Biden's, he said that increasing taxes on the wealthy to decrease taxes on the middle class is fair, not redistribution. By definition, obviously, it is redistribution - increasing taxes on one group of income earners so you can lower it on another group is inherently a policy of redistribution (see: Robin Hood). Whether redistribution is desirable or not is arguable, whether it is "fair" is hard for me to understand. If it is "fair" that we need greater wealth redistribution, facilitated by the tax code, my next question would be - when is it fair enough? Remember this graph that I've showed before? How steep should this slope be before it feels fair enough?
The Soup Can Story
By request, here's the soup can story.
When Katie and I were first married Judd came to our little apartment for one reason or another. At some point he wandered into our pantry and foolishly I didn't send in a chaperone. A few minutes later he came out with the labels from a few of our cans (we probably only had a few) and a grin on his face. We spent the next few weeks eating mystery food. There's the story.
Since then he's written for Jeb Bush and chased black helicopters. The seed of mischief has always been there...
When Katie and I were first married Judd came to our little apartment for one reason or another. At some point he wandered into our pantry and foolishly I didn't send in a chaperone. A few minutes later he came out with the labels from a few of our cans (we probably only had a few) and a grin on his face. We spent the next few weeks eating mystery food. There's the story.
Since then he's written for Jeb Bush and chased black helicopters. The seed of mischief has always been there...
Thursday, October 02, 2008
Best of April 2008
Overall not as hard to select this time around. October 2007 was more impactful for me - probably more a comment on me than the talks. Here's my top five to remember, in descending order (last being the top talk I want to remember):
A Matter of a Few Degrees - Uchtdorf
The Lord requires not only outward acts but also your inner thoughts and feelings to be close to the spirit of the law. God “require[s] the heart and a willing mind.”
Daughters of God - Ballard
There is no role in life more essential and more eternal than that of motherhood.
Concern for the One - Wirthlin
The Lord did not people the earth with a vibrant orchestra of personalities only to value the piccolos of the world. Every instrument is precious and adds to the complex beauty of the symphony. All of Heavenly Father’s children are different in some degree, yet each has his own beautiful sound that adds depth and richness to the whole.
My Words...Never Cease - Holland
In a sense Joseph Smith and his prophetic successors in this Church answer the challenge Ralph Waldo Emerson put to the students of the Harvard Divinity School 170 years ago this coming summer. To that group of the Protestant best and brightest, the great sage of Concord pled that they teach “that God is, not was; that He speaketh, not spake.”
Ask in Faith
We can move beyond routine and “checklist” prayers and engage in meaningful prayer as we appropriately ask in faith and act, as we patiently persevere through the trial of our faith, and as we humbly acknowledge and accept “not my will, but Thine, be done.”
Editorial Notes:
1) Is it not striking how frequently Joseph Wirthlin makes this list despite being the speaker most likely to cause me to wake up in a pool of drool? He and Neal Maxwell are the LDS versions of straight-to-DVD, but for different reasons.
2) One of the first lists ever not to contain Henry B. Eyring. Maybe I should reread.
3) I think like a good stable Utah ward, David Bednar can probably stake his claim on a pew near the front and keep it for the next generation. He and the Hollands will likely be sharing Cheerios. Makes it tough for the rest of the group when these two and Henry Eyring are so good and boxing out.
4) Am I going to a warm place when I die because the prophet is frequently omitted from these? Am I in trouble for making this seem like a competition? (By the way, it's not, it's a way for me to remember)
5) Really, reread Bednar's discourse on prayer and try it for a week. If you're not satisfied, I'll refund the price plus shipping.
A Matter of a Few Degrees - Uchtdorf
The Lord requires not only outward acts but also your inner thoughts and feelings to be close to the spirit of the law. God “require[s] the heart and a willing mind.”
Daughters of God - Ballard
There is no role in life more essential and more eternal than that of motherhood.
Concern for the One - Wirthlin
The Lord did not people the earth with a vibrant orchestra of personalities only to value the piccolos of the world. Every instrument is precious and adds to the complex beauty of the symphony. All of Heavenly Father’s children are different in some degree, yet each has his own beautiful sound that adds depth and richness to the whole.
My Words...Never Cease - Holland
In a sense Joseph Smith and his prophetic successors in this Church answer the challenge Ralph Waldo Emerson put to the students of the Harvard Divinity School 170 years ago this coming summer. To that group of the Protestant best and brightest, the great sage of Concord pled that they teach “that God is, not was; that He speaketh, not spake.”
Ask in Faith
We can move beyond routine and “checklist” prayers and engage in meaningful prayer as we appropriately ask in faith and act, as we patiently persevere through the trial of our faith, and as we humbly acknowledge and accept “not my will, but Thine, be done.”
Editorial Notes:
1) Is it not striking how frequently Joseph Wirthlin makes this list despite being the speaker most likely to cause me to wake up in a pool of drool? He and Neal Maxwell are the LDS versions of straight-to-DVD, but for different reasons.
2) One of the first lists ever not to contain Henry B. Eyring. Maybe I should reread.
3) I think like a good stable Utah ward, David Bednar can probably stake his claim on a pew near the front and keep it for the next generation. He and the Hollands will likely be sharing Cheerios. Makes it tough for the rest of the group when these two and Henry Eyring are so good and boxing out.
4) Am I going to a warm place when I die because the prophet is frequently omitted from these? Am I in trouble for making this seem like a competition? (By the way, it's not, it's a way for me to remember)
5) Really, reread Bednar's discourse on prayer and try it for a week. If you're not satisfied, I'll refund the price plus shipping.
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