Tuesday, December 29, 2009
Read an article titled "How your Income Stacks Up" written by Kevin McCormally on Yahoo News. It's full of bunk. The IRS statistics are given out by Kiplinger in a highly misinterpretable way. That is, they are bunky; full of the bunk. Mr. McCormally digested that bunk and put it into a highly respected news outlet. I wouldn't expect much more out of any news outlet, much less one called "Yahoo News", of which I am a constant reader (part of the Yahoos that make their news worth printing I guess). Here's my argument. If 23% of the taxes are paid by the 1% of people who make over 410k per year, a number which I calculate to be approximately 42,000 people for each state in the union, (but then we know the weight is on the states where real estate and cost of living is sky-high, so we're probably talking about less than 10k of the super upper class per state), why should you need to show the rest of the funky numbers? Stick with that number. 1% of people are paying 23% of all taxes. Here's why they don't stick with just that number, they can't. The IRS data was designed to reflect how much of all the taxes were paid by groups of higher than 1% at a time. The IRS data was designed to show the broad spectrums of salaries, not just the waypoints and soundbites. And the article fails to note that it just so happens that if you make over 110k you're much more likely to make over 400k because, there's a happy little understanding there which allows companies to nod and give you a fat salary and allow you to live in expensive areas. If you're valuable enough to demand over 110k, you're in the sweet spot where you're allowed a big jump in salary to pay for your yacht, real estate, other real estate, golden parachute, etc. If the chart were in anyway capable of speaking laymans terms with regards to the IRS data, it would show that we have most of the taxes being paid by you and me who make a measly 34k per year. We and the next bracket above us 60k, pay our taxes in leaps of 20%, where-as the super upper classes pay out in leaps of 10% per bracket. The bulk of taxes is paid by you and me because there just aren't enough richy richertons to pay it all. What it means is that richy richerton then swings a deal with the fed to make the stock market pay them just a little more so they can say they're fixing "unemployment", and when the stock market isn't doing so well, richy richerton has to dump more money into us poor saps down here on main street so we can get back to work, because paying us is then worth more to them. And then the pendulum swings the other way. If we were paid more, our leap to the next tax bracket would widen even more and the IRS would have to restore this careful balance and tax them richies again. They walk a fine line in paying us what they bare minimum have to, so that they don't get taxed any more, and so that the market pays them fine returns. Hey, don't anybody worry, we're just cattle right? We don't cause a stir, do we. And we're too dumb to be able to read your handy chart right Kiplinger?