Draft report of the US fiscal commission

[Loki]

http://www.nytimes.com/interactive/2...s-graphic.html

[GGT]

I did that puzzle yesterday and fixed the budget by 60% spending reduction, 40% tax increases.

[Being]

http://www.nytimes.com/interactive/2...s-graphic.html

I don't get it. Why doesn't the section for Social Security include an option for removing the cap? More broadly, why doesn't anyone who is concerened about SS insolvency ever include removing the cap as part of the solution?

[GGT]

Payroll tax: Subject some incomes above $106,000 to tax
When the payroll tax – which finances Social Security and Medicare – was created, it covered 90 percent of all income. Today, with a ceiling at $106,800, it covers closer to 80 percent. This option would gradually raise the ceiling, until 90 percent of income was again subject to the tax.

[Dreadnaught]

Got mainly by nailing down on Medicare and Social Security, but keeping tax rates lower. Love that this debate is finally happening in places like the NYTimes, which has otherwise let Paul Krugman run wild about how we need more borrowing.

[Loki]

Krugman has gotten increasingly insane since 2008.

[GGT]

Got mainly by nailing down on Medicare and Social Security, but keeping tax rates lower. Love that this debate is finally happening in places like the NYTimes, which has otherwise let Paul Krugman run wild about how we need more borrowing.

Only if you've skipped reading any of their other sections. Like healthcare or education. Tax and spend vs borrow and spend has been part of their coverage for years.

[Lewkowski]

Krugman has gotten increasingly insane since 2008.

His stance that the United States should have 4% inflation in order to fix the economy is particularly awful.

[Loki]

He was also enraged about the deficit reduction proposal, which apparently was a renewed assault on the middle class.

[GGT]

He was also enraged about the deficit reduction proposal, which apparently was a renewed assault on the middle class.

Krugman isn't the only one saying that, though. Right-leaning opinionators and news sources have said the same thing, especially regarding Bush's tax cuts and taxable income over $250,000. They frame it as an assault on small business, which is thought of as the middle-business-class.

[Loki]

I think Lewk already addressed the absurdity of claiming that the top 15% of the population is middle class.

[Being]

Krugman isn't the only one saying that, though. Right-leaning opinionators and news sources have said the same thing, especially regarding Bush's tax cuts and taxable income over $250,000. They frame it as an assault on small business, which is thought of as the middle-business-class.

And last I remember, small business is considered 500 employees or less; one of the reasons so many large companies broke up into smaller "Business Units" back in the '90s.

[GGT]

I think Lewk already addressed the absurdity of claiming that the top 15% of the population is middle class.

And last I remember, small business is considered 500 employees or less; one of the reasons so many large companies broke up into smaller "Business Units" back in the '90s.

So which is it? Small business is at the top 15% of income earners, or small business has a lot of middle income earners?

The figures go both ways. "Small business" can mean a LLC of attorneys, physicians, or financial advisers that make millions. But it can also mean a mom 'n pop shop barely bringing in $50,000/year.

[Lewkowski]

So which is it? Small business is at the top 15% of income earners, or small business has a lot of middle income earners?

The figures go both ways. "Small business" can mean a LLC of attorneys, physicians, or financial advisers that make millions. But it can also mean a mom 'n pop shop barely bringing in $50,000/year.

Well it depends on how you define a "Small business." Devil is in the details you know? I don't think a lot of what most people consider a "small business" is really middle class. That doesn't mean we should raise their taxes of course but its disingenuous to say someone making 250k a year is middle class.

[GGT]

Well it depends on how you define a "Small business." Devil is in the details you know? I don't think a lot of what most people consider a "small business" is really middle class. That doesn't mean we should raise their taxes of course but its disingenuous to say someone making 250k a year is middle class.

That's just it, though. Defining "small business" and defining "middle class" has moving goal posts. But they're common words used to appeal to emotion.

If you're in Mississippi making $250,000 (taxable income) you're probably wealthy. If you're in San Francisco making the same (taxable) amount, you're probably middle income. It's relative.

Wasn't that the gist of one of Dread's threads about taxes being pegged to local COL?

[Loki]

If you're in Mississippi making $250,000 (taxable income) you're probably wealthy. If you're in San Francisco making the same (taxable) amount, you're probably middle income. It's relative.

No, you're not. The median income in San Francisco is nowhere near $250,000 (it's actually about $80,000). You'd be hard-pressed to find a single major city in the US where the median income is anywhere near $250k.

[GGT]

No, you're not. The median income in San Francisco is nowhere near $250,000 (it's actually about $80,000). You'd be hard-pressed to find a single major city in the US where the median income is anywhere near $250k.

I was using a DINKY metric. If the median individual income in SF is 80K, then what's the average for a couple?

As I said, it's all relative. It's not strictly about income anyway, because COL matters. That's what Dread and aggie were trying to say. If you look at home prices, the disparity is crystal clear.

[Being]

No, you're not. The median income in San Francisco is nowhere near $250,000 (it's actually about $80,000). You'd be hard-pressed to find a single major city in the US where the median income is anywhere near $250k.

Why did you all of a sudden equate middle income with median income?

[Lewkowski]

Why did you all of a sudden equate middle income with median income?

Because its in the middle? Mean income can be skewed by outliers.

GGT -

Household income is the typical metric used. If one person works and the other does not that changes their purchasing power and potentially their class.

[GGT]

Because its in the middle? Mean income can be skewed by outliers.

GGT -

Household income is the typical metric used. If one person works and the other does not that changes their purchasing power and potentially their class.

As can DINKY. Like I said, look at an area's housing costs. Whether buying or renting. There was a piece in the NYT today about what young single people pay for an 8 X 10 room in the city....you'd probably faint.

[Being]

Because its in the middle? Mean income can be skewed by outliers.

Defining middle class isn't as simple as distribution of points along the X axis.

[GGT]

Household income as the metric...what's that mean, though? My sister and her husband both earn incomes, and his mother lives with them. Does her SS count as part of their Household income? Some couples file separate income tax forms, does that mean their Household income isn't considered jointly? And are other things like food stamps, rent or day care subsidies considered as Household income?

Yeah, yeah, all this can be looked up under IRS definitions, but that's not the point.

Maybe someone needs to start a thread exploring what the hell middle class means.

[Loki]

I was using a DINKY metric. If the median individual income in SF is 80K, then what's the average for a couple?

As I said, it's all relative. It's not strictly about income anyway, because COL matters. That's what Dread and aggie were trying to say. If you look at home prices, the disparity is crystal clear.

http://en.wikipedia.org/wiki/Highest...least_50.2C000

[LittleFuzzy]

Defining middle class isn't as simple as distribution of points along the X axis.

No, but it's one relatively simple and reasonable way to do it. You could say, plot the distribution graphically and say anyone within two deviations of the middle is middle class and you won't get 250,000k in your limit either. But I guess that's still mostly the X axis as far as you're concerned. How about something that's not a point metric. If you need financial aid to send a kid to a good college for her/his 4-year degree *private schools, some upper-tier public universities* you're middle-class. Huh, a household with 250k income isn't going to qualify for need-based aid for an undergraduate education at any but the most ridiculously expensive private schools.

[Being]

No, but it's one relatively simple and reasonable way to do it. You could say, plot the distribution graphically and say anyone within two deviations of the middle is middle class and you won't get 250,000k in your limit either. But I guess that's still mostly the X axis as far as you're concerned. How about something that's not a point metric. If you need financial aid to send a kid to a good college for her/his 4-year degree *private schools, some upper-tier public universities* you're middle-class. Huh, a household with 250k income isn't going to qualify for need-based aid for an undergraduate education at any but the most ridiculously expensive private schools.

The fundamental flaw of assuming median income has anything to do with defining middle class is that as wealth disparity increases, the median decreases. As an extreme example, if 90% of incomes are in the poverty range and 10% are well above the poverty range then the median is in the poverty range. I don't believe people living in poverty can be considered middle class.

[LittleFuzzy]

The fundamental flaw of assuming median income has anything to do with defining middle class is that as wealth disparity increases, the median decreases. As an extreme example, if 90% of incomes are in the poverty range and 10% are well above the poverty range then the median is in the poverty range. I don't believe people living in poverty can be considered middle class.

Which is fair, but everyone else has the same objection to declaring 250k to be middle class and since it's the exact same objection, it is at least as fair.

[Being]

Which is fair, but everyone else has the same objection to declaring 250k to be middle class and since it's the exact same objection, it is at least as fair.

I generally agree that 250k is beyond middle class. But exceptions might include people like Santa Barbara police, fire-fighters, and other public servants forced to live in a locale otherwise beyond their means.

[GGT]

The Bush tax cuts' effect on the deficit in one graph
By Ezra Klein

http://voices.washingtonpost.com/ezr...ect_on_th.html

[Dreadnaught]

Yeah, Ezra isn't really big enough for his shoes. He's a JournoLister and a major liberal.

Once again, you can't distill things like that down to a chart with a simple "revenue projection". It's bad financial modeling, in this case done by a left-leaning policy group (CBPP).

[GGT]

Yeah, Ezra isn't really big enough for his shoes. He's a JournoLister and a major liberal.

La tee da, you don't like Ezra because he's a librul? He's not the only one asking whether Repubs will vote to raise the debt ceiling. It's indisputable that extending Bush tax cuts will add to the deficit, while finding spending cuts is already difficult.

Once again, you can't distill things like that down to a chart with a simple "revenue projection". It's bad financial modeling, in this case done by a left-leaning policy group (CBPP).

One chart, one set of projections, holy crap! Earlier I asked how the debt commission based their projections, no one seemed to know. Next time I'll pick a chart from a right-leaning policy group, their model is probably better. Maybe it'll project that extending those tax cuts (especially for the top 2% earners) will create millions of jobs, just like they did the last ten years?