Author Archives: Jon Lowder

America’s Top 400

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The IRS annually produces a report that shows the tax rate for the 400 families with the highest household income and compares it to the tax rates for the other tens of millions of households.  The Clinton administration was the first to publicize the report, the Bush administration stopped the practice (surprise!) and the Obama administration has once again started to publicize them.  So what do you think happened?

The incomes of the top 400 American households soared to a new record high in dollars and as a share of all income in 2007, while the income tax rates they paid fell to a record low, newly disclosed tax data show. 

In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site without announcement that were discovered February 16. (For the report, see Tax Analysts Doc 2010-3372 .)…

Payroll taxes did not add a significant burden to the top 400, not changing the rounding of rates by even one decimal. With payroll taxes taken into account, the effective tax rate of the top 400 would be 17.2 percent in 2006 and 16.6 percent in 2007, my analysis shows — the same as not counting payroll taxes. As a point of comparison, about two-thirds of Americans pay more in Social Security, Medicare, and unemployment taxes than in federal income taxes…

Most of the income going to the top 400 tax returns is from capital. Salaries and wages accounted for only 6.5 percent of the top 400's income in 2007, down from 7.4 percent in 2006 and 26.2 percent in 1992. The average salary rose from 2006 to 2007, however, just at a slower rate than overall income growth. 

The biggest source of income was capital gains, which are taxed at a maximum rate of 15 percent. Gains accounted for 66.3 percent of 2007 income for the top 400, up from 62.8 percent in 2006 and 36.1 percent in 1992…

The report shows that the number of the top 400 who paid an effective tax rate of 0 percent to 10 percent declined slightly, to 25 in 2007 from 31 in 2006. In 1992 only 6 of the top 400 paid an effective income tax rate of less than 10 percent. 

Another 127 paid 10 percent to 15 percent in 2007, up from 113 in 2006. 

 Only 33 of the top 400 paid an effective tax rate of 30 percent to 35 percent, which is the maximum federal tax rate.  

Oh-Oh-Ochocinco

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Chad "Don't Call Me Johnson" Ochocinco has his own cereal called Ochocinc'O's (clever huh?) and it looks like they made a little mistake when they produced the box:

The number printed on the box of "Ochocinc'O's" is suppose to send callers to the charity "Feed The Children". Instead, callers hear a sultry voice offering an adult conversation.

Tara Sand and her family, including her 9-year-old daughter, called 1-800-HELP-FTC on speakerphone…

The correct number to "Feed the Children" is 1-888-HELP-FTC. An operator who answered that number said she wasn't aware of the problem and notified her supervisor.

Ochocinco told 9 News that the number was clearly a mistake for which he was not responsible. He is confident that PLB Sports will fix the problem.

"We don't need anything to give our Bengals a bad name, especially Chad," said Sand. "He's obviously trying to do something great by doing this [for] 'Feed The Children.' "

Lost Another Good One

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I'm not sure what happened, but apparently Kim Underwood has left the employ of The Winston-Salem Journal. Since moving to Winston-Salem in '04 I've enjoyed reading Kim's work in the Journal and, more importantly to me, I've enjoyed shooting the breeze with him over a cup of coffee on a few occasions.  I even had the opportunity to rub elbows with him for the day job when he covered the Triad Apartment Association's Labor of Love project last winter, and it was a great experience.

Apparently I'm not the only one who is bummed by Kim's leaving the paper. Linda Brinson, former Journal editorial page editor, wrote a "Letter to the Editor" about it:

For many years, his wise and gentle columns touched us all, particularly the columns about his dog, Buster, and the children in his life, Sparkle Girl and Doobins. Kim also is a skilled, highly professional reporterdevoted to fairness, integrity and ethics, qualities that are too often lacking in today’s journalism. He will be missed, and the Journal is diminished by his leaving.

Like I said, I don't know what happened, but I do know that the Journal's lost another good person.

Happy Days

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You know how the economists are all like, "The recession is over! The recession is over!" and we regular schmoes are all like, "Maybe, but the world's still a big ****hole"?  Well, the Census Bureau is here to validate our feelings:

The new figures show, among other things, that the number of people getting married fell to a record low level in 2009, with just 52 percent of adults 18 and over saying they were joined in wedlock, compared to 57 percent in 2000…

The government revealed that the income gap between the richest and poorest Americans grew last year by the largest margin ever, stark evidence of the impact the long recession starting in 2007 has had in upending lives and putting the young at greater risk.

The top-earning 20 percent of Americans — those making more than $100,000 each year — received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by the bottom 20 percent of wage-earners who fell below the poverty line, according to the newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, government data show. Families at the $50,000 median level slipped lower.

Three states — New York, Connecticut and Texas — and the District of Columbia had the largest gaps in rich and poor, disparities that exceeded the national average. Similar income gaps were evident in large cities such as New York, Miami, Los Angeles, Boston and Atlanta, home to both highly paid financial and high-tech jobs as well as clusters of poorer immigrant and minority residents.

On the other end of the scale, Alaska, Utah, Wyoming, Idaho and Hawaii had the smallest income gaps.

Headlines

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Local news operations now publicize their stories through a variety of media including Twitter and Facebook.  I have no idea how WXII doles out the responsibility for pushing content from their website to Twitter, but they may want to have a chat about how those 140 characters are used.  For a story today the Twitter feed read thusly: "Winston-Salem Jogger Struck By Vehicle http://bit.ly/aB1uqp." On the website the headline was "Job Seeker At Fair Struck By Vehicle" and the first paragraph read:

A man who was running to get in a hiring line for the Dixie Classic Fair on Tuesday morning was struck and injured by an SUV along Deacon Boulevard.

It ain't the end of the world but there's a big difference between jogging and sprinting across the street to a job interview, and I think it behooves the news ops to make sure all of their headlines accurately reflect the content of their stories.

Bradbury’s Prescience

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After reading this piece (h/t to Lex for the pointer), which is an essay that basically says that Ray Bradbury accurately predicted today's America when he wrote Fahrenheit 451, I've decided that I either didn't read the book in high school and depended on Cliff Notes when I wrote my paper, or my memory is in much worse shape than I thought.  I highly recommend reading the essay, even though it'll make you feel guilty about watching TV.  At least until the next episode of Amazing Race comes on.

The Hill’s Revolving Door

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Live in D.C. long enough you'll realize that there's a fairly standard playbook for the ambitious:

  • Get a job, no matter how lowly, in a Congresscritter's office.
  • Pay your dues.  Work insane hours for pretty low pay, at least by D.C. cost of living standards.
  • Build connections.
  • Go to work for a lobbyist, or start your own lobbying firm, and continue to work insane hours but now make some insanely good money in the process.
  • Pray that your people stay in power.
  • If necessary repeat the process to rekindle your connections/influence.

One guy I knew worked for a Republican senator, left working for him to partner with a couple of guys in a new lobbying firm, and his first year was close to earning seven figures.  I heard through the grapevine that subsequent years were even better, but I lost touch over the last few years so I have no idea how the rise of the Democrats in 08 affected his business.  I suspect it wasn't good, especially after seeing this research (found via Freakonomics blog)about the direct correlation between influence and income of ex-staffers from the Hill.  From the summary:

While there is no scarcity of anecdotal evidence, direct econometric evidence on the extent to which previous ocials are able to convert political contacts into lobbying revenue remains, to the best of our knowledge, non-existent. In this paper we provide such evidence. In particular, we study how the lobbying revenue of congressional sta ers turned lobbyists depends on the power of the congressional politicians for whom they have worked in the past…

Our main nding is that lobbyists connected to US Senators su er an average 24% drop in generated revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress and it persists in the long-term. The sharp decrease in revenue is also present when we study separately a small subsample of unexpected and idiosyncratic Senator exits. Measured in terms of median revenues per ex-sta er turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately a $177,000 per year fall in revenues for each aliated lobbyist. The equivalent estimated drop for lobbyists connected to US Representatives leaving Congress is a weakly statistically signi cant 10% of generated revenue. We also nd evidence that ex-sta ers are more likely to leave the lobbying industry after their connected Senator or Representative exits Congress.

Here's a nice synopsis of the research: