Some Democratic operative emailed me this USA Today piece, Tax Bills in 2009 at lowest level since 1950:
Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.
“The idea that taxes are high right now is pretty much nuts,” says Michael Ettlinger, head of economic policy at the liberal Center for American Progress.
Also, too, USA Today says that the average income in the USA is $102,000. I think they mean “average income for a married-couple family“. Even so, I remember when $100K/year was big money.
MikeJ
Count on the GOP to pounce on the stat from USA Today, even though it’s wrong in the way you point out. They’ve already tried “$250k pa isn’t that much” or “a firefighter married to a schoolteacher make that.”
I wonder what the mean is in that survey too. In the stats you linked to, the mean is a quarter lower. Which means that the really, really rich drive up the average.
When Bill Gates is in a room with 30 homeless people, on average everyone in the room is worth a billion dollars.
Steeplejack
@MikeJ:
What you said. Median income would be a better statistic than average income.
Brandon
The questions is, instead of surrepticiously emailing this (old) story to a blogger, why aren’t Democrats standing up in front of cameras and repeating that line until they are blue in the face? Oh that’s right, they’re idiots. God I love being an ostensible Democrat. Can we bring back the Whig party already? I have no idea what they stood for, but at least they had a cool name.
homerhk
Not fair. You can’t expect people to be persuaded by facts, these days. Not on the right wing or on the left wing. Innuendo, inference and opinion are the way to go. You may say that the tax bills are low right now but I believe that they are not. If you question my belief, you are questioning my faith and frankly I don’t want to know anyone who has the gall to do that.
Mike Kay
there’s a substantive difference btwn “average” and “median”
mistermix
@Brandon: In fairness, the story came out yesterday and he sent it to me yesterday. I mainly blog in the morning, so here we are.
scav
My badstatdar was probably heard in nearby states just there.
Mike Kay
meanwhile, Elena Kagan is remilitarizing the rhineland.
Kirk Spencer
Mike Kay, that was going to be my point, shame on you for stealing it (grin).
Seriously, even if it should be household instead of individual, an average (mean) of just over $100,000 when the median household is around $55,000 is just one more indicator of a huge imbalance.
Old joke as example. There are 10 people in a bar. 9 of them earn about $50K per year, the other is Bill Gates. Median is $50,000, mean is $3.4 million (given the $30m nominal wage Bill Gates got – we’ll ignore dividends and such).
joe from Lowell
I don’t think it’s remotely surprising that Obama’s, and the Democrats’, numbers began to turn around right around tax day.
“Making Work Pay Tax Credit? Huh. Wow, that’s a lot lower than last year.”
The numbers are the numbers.
rickstersherpa
@MikJ & Steeplejack
What you said twice over. “Average” is very deceptive since the rich, very rich, super rich, and Steve Schwartzman drive up what is “average.” According to the U.S. Census survey, half of all married couples (which means predominately two income earners) was $74,732. Median means half of such families earn less than that, half earn more. I also note that the median income for families is substantially less than this, $63,211. Quite obviously single parent families are worse off, and the vast majority of such families consist of a mother and kid(s). Again, the growing fashion of the time, promoted by the David Brookses, Caitlan Flanagans, and Ross Douthats of the world, is that such penury is deserved since the such women are either sluts or minority or both and deserve this fate since they have not tied their sexuality into a properly subordinate position with a male provider. http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2008_3YR_G00_S1901&-ds_name=ACS_2008_3YR_G00_
WereBear
I agree that Democrats should pound this issue into the ground like a tent peg. But they are thinking of their fans, who would likely say stuff like “I’m sick of hearing about lowering taxes! I get it already! What about my Big Issue?”
One of the problems about dealing with idiots is that we wish we didn’t have to. Idiots require mind-numbing repetition, because they have a short attention span and an even smaller ability to take in new information, preferring to absorb it osmotically from the larger culture.
Idiots don’t mind doing this; actually, it’s what they do.
Mudge
I found it interesting that the CAP was identified as “liberal” (not even progressive), as if the numbers have some partisan bias. I’ll keep my eyes open, but I don’t remember the AEI, for example, being identified as “conservative” (or teabaggish) very often.
Mike Kay
Braking
Elena Kagan has just occupied the Sudetenland.
Brandon
@mistermix: please don’t be mistaken, it is not a gripe directed to you or this operative specifically. This is about Democrats being gifted the perfect talking point to rebut this teaparty nonsense and they are totally ignoring it. They should be repeating this figure until they are blue in the face. They should be saying over and over that non-stimulus Federal spending is today lower than it was under Bush. Instead, they gave let teabaggers and Republicans perpetuate the lie that government spending is outof control and that your taxes have gone up/are too high. Instead this stuff has perpetuated to the point where it may be impossible to convince the American people otherwise. Case in point: I was playing my adult Sunday league soccer last week and somehow the referee started telling me about this garbage, out of nowhere. It was right there on the topof his head and for some reason he had to tell me about it.
In summary: Democratic messaging stinks. Even when they are hand delivered lemonade, they brush it aside because they are pre-occupied with all their lemons. And that is why I think they are idiots. I despise Bill Clinton and after working for EPA under his watch and now realizing that he was responsible for bringing Summers and Rubin into public service, I have serious questions why firebaggers and PUMAs long for the dream of a progressive Clinton paradise, however there was one little thing the man was excellent at and it was pulling out nuggets like this and repeating them until the color of his face matched his nose. He would repeat them until every American was as familiar with it as their favorite advertising jingle. It is bizarre to me, as Democrats witness the effectiveness of Republican reinforced repetition of talking points (in their case lies), and with this existing model of communication forged by Clinton, that they are so dense that they would rather try to disprove false negative Republican/teabagger attacks than go on the attack themselves. MikeJ (no offense) and his concern trolling on “mean” income is a case in point.
I wish Democrats were permanently assigned/hired someone who’s sole job was to scream at them when the are in the midst of messaging FAIL. I bet the Hamsher might even be available.
steve
That’s a total bullshit number. They must not be counting Social Security and/or Medicare.
Johnny B
I think we need to focus on the numbers concerning median incomes. For families, the median income is $63,000 and for married couples/families it is $74,000. 67% of married couples/families make $99,000 a year or less, and 64% of families make $99,000 or less. While the average income is higher for both groups that’s a function of a few, very wealthy people being paid like European royalty.
If you focus on the average, you get a false sense of the country. For example, if you live in a village of 1,000 people in which Bill Gates and his wife are residents, the average income will exceed millions of dollars a year. But the vast bulk of those 1,000 people won’t be millionares.
When you consider the inflation rates for essential items like health care, college education, and housing (though that has gone down), it is amazing what little resources most American families have to try and create a “middle class” lifestyle.
MikeJ
@Brandon: Concern trolling? I’ve been know to troll, but I’ve never been concerned.
atlliberal
The average of 3 million and 0 is 1.5 million. I’m sure the guy who makes 0 isn’t feeling like a millionaire.
Anticorium
I’m not sure if someone’s mentioned this yet, but Bill Gates has a lot of money.
wvng
@Steeplejack: Nice to see people understand the misuse of statistics. As you noted, the median would be a much more useful statistic.
wvng
Well, yes, because the temporary Stimulus Bill tax cuts ended in January 2010. Which I’m sure someone (Boehner?) will now spin as a tax increase.
Kirk Spencer
@wvng: Actually, reporting BOTH median and mean is more useful. You can tell quite a lie using median incomes only as well — not least, the implication that “above” distribution reflects “below” distribution.
Jude
100k/year is still a lot of money.
wvng
@Kirk Spencer: “Actually, reporting BOTH median and mean is more useful. ” Well, yes, but if I had to choose just one parameter to represent a highly skewed distribution, it would be the median.
Bob
I’m not impressed, thanks DougJ.
Low tax rates equals big debt. Not a good trade in my book.
debit
@Jude: You said it.
@thread: I work in a tax office and just about everyone this year came in grim and resigned then left stunned and elated.
Where I’m seeing unhappiness is with the small businesses I do payroll for. They are very unhappy about their payroll liabilities as their payrolls grow. I had one Somali client tell me (re: his almost 2 million a year payroll) that he was going to vote republican next time. I had to bite my lip (can’t talk politics at work) and say it was a republican (Timmeh Pawlenty) that caused his unemployment rates to skyrocket. I’d also like to point out that their payrolls are growing instead of shrinking, therefore their billing must also be increasing, but again bite my lip.
Leonard Stiltskin
In this thread we have everything that is wrong with the Democratic Party. A bunch of numbers geeks dissecting mean vs. average income instead of focusing on the main issue, that taxes have gone down.
Hand a Dem a talking point, turn it into an essay.
ADM
Steve@#16, Kevin Drum does the math and agrees that taxes consumed more than 9.2% of all income – more like 27.5%.
debit
@debit: Man, I’m incoherent before coffee.
Kirk Spencer
@wvng: I think that given what the ‘average/median’ income is used for, you’re right. I’ve just learned enough to twitch at ‘always’ statements. There are times the mean is better if it’s the only, and times for both.
And standard deviations and chi squares and… sigh.
wrb
$102,000.
Yowza. In this county average family income had just broken $30,000
before the recession after having howevered around $20,000 ever since the urban liberels swiped the natural resourses.
jwb
And meanwhile, Joe Straus, Speaker of the Texas House, has taken any kind of tax increase off the table for next session, despite staring at a California-sized budget abyss: “The Legislature must be mindful that Texans will be facing higher federal taxes as the nation deals with the deficit, so state leaders should not add to that burden, Straus said.” And Straus isn’t even one of the bad guys in this state. It will certainly be good theater watching the politicians eviscerate state government next year—everything, and I mean everything, is going to be chopped to the point that it will be nonfunctional. I guess we’ll be trying a little unintentional experiment in libertarianism and we’ll see if people like not having a functioning government.
Jeff Darcy
It would be interesting to see these numbers broken down by income percentile. Did the overall tax burden really ease because the lower and middle classes got some relief, as the article tries very hard to imply but doesn’t prove? Even drastic measures targeted at those who already pay little tax are unlikely to affect the total much. Conversely, since a very small percentage of people account for a very large percentage of both income and tax, a change that affects them will affect the total much more. If the total effective tax rate changed, you can be pretty darn sure it’s because the effective tax rate on the top 0.1% changed.
Dan
Someone already mentioned median income, which would really reflect what the average person makes.
And yes, 100k used to seem like a lot, because it was, and kind of still is, for a single earner. But not many families can get by with a single earner anymore.
Kirk Spencer
@Dan: ummm, Dan? I’ve got news for you, $100K is still kind of a lot even for a household. Based on last year’s reports, that $100,000 line is roughly the fifth quintile break.
In other words, at a household income of $100,000 80% of the public earns less AS A HOUSEHOLD.
If that’s “not a lot” then maybe there’s a problem here.
that was sarcasm, of course. I’ve come to think we’re in the early stages of a class warfare situation, and things like the Tea parties are attempts to harness and redirect the ire.
Cathie from Canada
I’m so old, I remember when $10,000 a year was a very good salary!
Bill H
Good Lord, when I got out of the Navy my ambition, which I didn’t really expect to achieve, was to make $50,000 in one year. Um, that was in 1963.
Cyrus
@ADM:
In that case, OECD figures seem relevant here. 27.5 percent is right around the median OECD “total tax wedge” and, just by eyeballing where the big rich countries are, it’s way below the mean. (None of the figures in my link there exactly match the ones used here so far. I don’t know if that’s because my link is to outdated data or if it’s because my link is talking about something slightly different, but either way they’re all close enough that I think it’s still helpful.)
So American taxes on people might not be unusually low. Maybe. However, they definitely, obviously, indisputably aren’t unusually high compared to other countries’ taxes on people.
Ed Drone
I remember that, too — back before I made that much. Now I’m scrounging for money to pay credit card and mortgage bills, and feed and clothe my family.
Anybody wanna buy a banjo?
Ed
Church Lady
@Ed Drone: What kind? I’m looking for an old Gibson Mastertone to give my husband for his birthday. It’s what he played when he was young, traveling the Tennessee-Mississippi-Arkansas circuit.
Craig Pennington
What I’d like to see is a quartile or quintile breakdown. Somehow I’m betting that the middle isn’t as low — I suspect the federal tax is much less progressive today than it has been.
jonas
100k is or isn’t a good income depending on where you live and what housing costs. In NYC, LA, or Washington, D.C., you’d barely be scraping by. In Boise, ID, it provides a pretty nice middle/upper middle class life.
Tip Top
Average income is $102,000? Time to get out of the library business.
Kirk Spencer
@Tip Top: (since this thread looks dead, I’ll hijack off this post)
Probably a good time to start looking out of the library business anyway. I’ve got 13 years of experience, to include time as a director. I became unemployed about 20 months ago when the funding source budgeted to my position got cut, and I’m still job hunting.
Since most library positions are tax funded, there aren’t a lot of openings. Where there are openings, there are a LOT of applicants. I’ve been in the final interview runoff more often than I want to think about right now.
Thing is, libraries are still coping. So if/when money comes back, we’re still not going to hire as many librarians. Some, sure, but we don’t need near as many catalogers and we don’t need as many reference specialists and that means we can use fewer people with less specialized education.
If you’re in and you are done within a decade, stay. If you think you’re at risk, or you’ve got two decades to retirement, start looking at alternatives. Or so my experience seems to indicate.
ruemara
Wow. 102k? …a college degree, 20 years in advertising…maybe 36k in a major market and that was 10 years ago. 1 medical set back and even that career has been lost to me. At this rate, 102k is what I will earn as sum of the past 10 years plus 6 more. Times like these, I’m not sure what the hell to think about the future. And these idiots are complaining?
Derek
@jonas:
“Barely scraping by” on 100k? Are you talking like, a family of four?