Enjoy your nine dollars

May 13, 2006

Guest Post by Morbo

The Washington Post ran an interesting chart this week that every [tag]Democrat[/tag] should memorize. It shows your annual savings under the latest [tag]Republican[/tag] [tag]tax cut[/tag]. Here are the figures:

$10,000-$20,000: $2
$20,000-$30,000: $9
$30,000-$40,000: $16
$40,000-$50,000: $46
$50,000-$75,000: $100
$75,000-$100,000: $403
$100,000-$200,000: $1,388
$200,000-$500,000: $4,499
$500,000-$1 million: $5,562
More than $1 million: $41,977

According to the U.S. Census Bureau, median income in the United States is $44,389. Math has never been my biggest skill, but I know what “median” means: half fall above, half below.

I am aware that the median may not be the best instrument to use here, because a relatively small number of super-high earners skew the data. But no matter how you slice this, most people are getting crumbs. As The Post noted:

[tag]Middle[/tag]-income households would receive an average tax cut of $20 from the agreement, according to the joint Urban Institute-Brookings Institution Tax Policy Center, while 0.02 percent of households with incomes over $1 million would receive average tax cuts of $42,000.

The bottom line is, the Republicans just offered huge numbers of taxpayers an annual savings of $2 to $46. Considering that people scoffed at a $100 gas rebate, this should be more than enough to make their blood boil anew.

Let’s put aside the wisdom of cutting taxes at a time of record deficits. Let’s put aside the question of straddling our children and grandchildren with more debt. Let’s just look at what is being offered here. Then let’s demagogue until the cows come home.

It’s high time for some good old-fashioned [tag]class[/tag] warfare. The ads write themselves: “The Republicans just bought all of their friends a shiny new car or a fancy fishing boat. You got a fast-food meal. Enjoy your nine dollars.”

Actually, median income is a lot better measure to use than mean income (what many people think of when they say “average income”), which is much more skewed by a few ultra-wealthy people.

In fact, the disparity between mean and median is one measure of how bad income inequality has become.

  • The median is precisely the measure to be used here because it is NOT skewed by a relatively few high values. The “average” would be skewed by a relative few: if readers of The Carpetbagger Report included Bill Gates, our median (middle) income wouldn’t budge; our average (mean) would make this group look Republicans.

    I think the press should stick with middle-income cut = $46 (a more exact value can easily be calculated if you have number of people in the different categories of income) and millionaires’ = $42,000 and let that hit home.

  • I’m thinking perhaps Janis Joplin’s “Mercedes Benz” in the background; open with the scene shown in F 9/11 of Bush in his tux noting the room includes the “rich and the richer. . . or as I like to call them, my base.”

    Then as the table in Morbo’s post fades over the top, the ominous voice over “President Bush and the Republicans just passed a tax cut that makes the rich even richer. The top 1% just got tax cuts larger than many Working American’s entire wages in a year — more than most classroom teachers make, more than most life-saving firefighters make, more than most of the sons and daughters at risk in Iraq.” [appropriate background phots flashing through].

    “So while the rich Republicans are spendng their $42,000″ [cut to photo of Hastert getting out of hybrid and into Hummer; fade chart over the top again with a highlight that slides from the $42,000 to the $2 as voice over starts again and photo changes to average American in older smaller car at gas pump] the tax break for most Americans wont even by a tank of gas in this Republican-led economy.”

    [slowly zoom in on section of chart for middle and low income earners; underneath show photos of students in line at college financial aid desk]

    “A 70-million dollar tax givaway to the wealthy, when the Republicans already have wasted the Clinton/Gore surplus of ____ billion dollars, and put this country _____ billion in debt. Who is going to have to pay all of that debt?” [zoom in on faces of the students in line]

    “Or, you can make the Republicans pay in November. Vote Democratic, for a better economy, less debt for our children, and fair treatment for hard-working Americans — not just for the rich” [if we have a photo of Abramoff or Delay getting into a Mercedes and driving off just as Joplin sings for the last time “wont you buy me a Mercedes Benz” that would be ideal]

  • I have always liked beating a dead horses. A guy has got to get his pleasure where he can. With that in mind, here is another post on mean vs. median. My contribution a very simple example.

    Consider the numbers 5, 10,15,20,25. The median, that number such that half the observations are less than or equal to is 15. The mean is (5+10+15+20+25)/5=15. Now suppose the last number 25 is changed to 100. The median does not change. However, the mean is now (5+10+15+20+100)/5=24.

  • Yes, the median is the proper measure.

    Where are the tax savings for lower earners coming from? I’m not aware of any direct tax cuts that affect them. Are they talking about the dividends and capital gains cuts? If so, the idea that people earning 10,000 or 20,000 are holding enough mutual funds to save even $2 is absolutely ludicrous. I must be missing something. And the 401(k) plans, the only investments that most Americans have outside their homes, are subject to ordinary income taxation – naturally, they don’t get the privileged treatment that the rich do.

  • Folks are correct to point out that high-end outliers skew the mean but not the median. That is why Republicans almost always rave about how well-ff average wage earners are under Bush – if Bill Gates walks into a bar the mean income goes up but the median does not. Not coincidentally, the bar’s mean benefit from Bush’s tax cuts goes through the roof.

  • “A 70-million dollar tax givaway to the wealthy, when the Republicans already have wasted the Clinton/Gore surplus of ____ billion dollars, and put this country _____ billion in debt. Who is going to have to pay all of that debt?” [zoom in on faces of the students in line]

    Brilliant. I’d only suggest that instead of zooming in on the faces of young adults waiting in a financial aid line at college, the shot should zoom in on a bunch of 1st and 2nd graders playing. Its pretty hard to begrudge 6 and 7 year olds anything. College students on the other hand… “I never went to no fancy college…”

    Again, though, the larger point is that the ad could be made and would be incredibly powerful (with or without my modest suggestion).

    Will it? Of course not. Whoever is in charge of spending the big bucks for Dem candidates do not (will not?) listen to the likes of zeitgeist and myself. Why? Good question. I’m available. How about you Zeitgeist?

  • you all might also be interested to follow the total %age of taxes paid by the “rich” over the last several years – it has gone up, not down during the Bush tax cuts. At the same time, capital investment has soared, deficits are down over projections EVERY SINGLE YEAR (and the CBO says, Gosh, we don’t know why our model has been wrong for so many years running), corporate balance sheets are flush with cash, unemployment is at or below where it was at the height of the dot.com boom that apparently Clinton created himself, and so on.

    You guys are all idiots. Go take some econ classes, then come back here and talk some more of your “class warfare” BS. Then YOU will be the ones explaining the laws of supply & demand to the other knuckleheads on this board.

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