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Politics and Economics
The point of raising tax rates is to raise tax revenue. However, raise the rate too high and tax payers will change their behavior to lower their tax bill. So is there a sweet spot for taxing the top earners in this country, where we can get the most revenue for our rate? Here's what the IMF has to say...
In developed countries, inequality of income is driven largely by a wage disparity between the highly skilled and the less skilled. Social mobility is stymied by lack of skills. Why don't some people acquire the skills they need to move up the economic ladder? Why are some people stuck?
What fosters social mobility? That is, what helps individuals move up the economic ladder? Mostly job skills and connections. In developed countries, job skills matter more than ever. Economic opportunity beckons those with the right skill set.
...many generations of Americans wanted to do better than their parents - especially when their parents struggled. For much of American history, our parents struggled. It's only been the last 50 or so years that most of us could take a breather. Is doing better than one's parents still the be all/end all of the American Dream? Should it be?
Housing is the biggest component of the Consumer Price Index and the hardest to spend less on in the near term, because costs like rent and mortgage are fixed (unlike food, where buying fewer prepackaged or fast-food meals can generate considerable savings). What people spend on housing pretty well reflects what they think they can afford over time. So how much has the cost of housing changed since 1999?
Lots of patterns to detect from these tables. In both 1999 and 2015, lower-income folk spent quite a bit more than their reported pretax income - evidence that pretax income is not a very good indicator of actual financial resources. In both years, households in the top two income quintiles had more earners, fewer seniors and were bigger than households in lower quintiles. It also appears that all income groups spent quite a bit more in 2015 than in 1999. So is life getting better overall for Americans? At this point, not enough data. Stay tuned.
When the current darkness lifts and partisan animosity is softened by the spirit of collective problem-solving, we could do worse than return to the ancient texts for understanding and advice. One such text is What is Driving U.S. Health Care Spending: America's Unsustainable Health Care Cost Growth by the Bipartisan Policy Center
...by the time you hit the median income in the US, chances are (like 91%) you are very happy or fairly happy.
Keep in mind the above chart is about tax revenue, not tax rates. The average OECD tax revenue is 34.2% of a country's GDP. The US revenue take is 25.9%. Denmark's is the highest, at 49.6% of GDP. Take home: the USA doesn't tax its citizens all that much, compared to its OECD brethren.
This mission is not all that different from that of a parent: provide a secure base while encouraging the child to leave its safety to explore the world. And thereby suffer and thrive.
Individuals who favor "avoidance goals" tend to feel less in control, less satisfied with their progress, and less competent than individuals with lots of "approach goals". In other words, their happiness feeder streams have become mere trickles.
Personal initiative is a proactive and goal-oriented mindset, characterized by long-term focus and persistence in the face of obstacles and setbacks. Such a mindset is action-oriented, planful, and anticipatory: quickly turning goals into actions - with back-up plans ready just in case.
...the wisdom of deficit spending depends on the economic cycle. If stuck in a recession, deficit spending can be helpful to give the economy a boost. But...
2.6%: the median profit margin at an independently owned fast-food restaurant, about a percentage point more at a corporately-owned location
Americans are still a fairly socially mobile people, but part of the population is stuck. What can the US government do to help these folk? Some ideas...
If I'm a roofer living in a working class neighborhood, I'm not measuring my status against super-rich CEOs or Hollywood superstars, I'm looking at how my relatives, neighbors, friends, associates, and fellow roofers are doing.
Ideally, governments seek to create conditions conducive to the pursuit of happiness. These would be conditions that foster the individual's sense of control and purpose, especially in the quest for social connection and status.
...happiness as felicity contains multitudes: a sweet and humble sense of well-being that comes from productive labor in harmony with one's nature and the world, mixed with gratitude for one's good fortune and satisfaction at being able to share the fruits of one's labor.
When Thomas Jefferson penned the Mighty Declaration, happiness was more than "being in the zone" or an internal state that accompanies smiling and laughing. Happiness was frickin' virtuous! Happiness was akin to felicity, a sense of wellbeing that comes from fruitful labor in harmony with the world.
The idea of relative poverty recognizes that basic needs extend beyond the merely material and include markers of status and belonging within a particular society. But "society" is an abstract concept. Society doesn't act on the individual directly but through intermediaries: family, intimates, friends, acquaintances, neighbors, teachers, co-workers, peers, public figures, the media - to name a few.