The truth about minimum wage and income inequality

[tokeprep]

and conversely, (note my graphs go from left to rioght in the proper direction...)

charts selected solely for their consistency of timeframe, with no regard for whether they support or oppose my conclusion. really i just searched for group-s commodity charts with a 10 year timeframe ending in 2012.

but look, they all follow the same path, up up up up fall back round 2009 (hope and change for the win of course...) then up up up for the sky!

corn wheat soya, palm oil, crude oil,, gold silver platinum palladium etc, all moving together,

or is it the dollar moving, while everything else stands still.

i know it's heresy but maybe, just maybe, the dollar is not at the center of the universe.
maybe, JUUUUUST maybe GOLD is the value that everything else, including the dollar orbits.

lets keep this between you and me though, dont let Pope Geithner hear about this theory or ill be sent to the inquisition.

How much has demand for commodities grown in Asia since 2001? How much of these prices increases is related to simple supply and demand? India alone imported $50 billion in gold last year, mostly for domestic consumption (not as an investment--mainly for jewelry). Do you know how much gold India imported in 2001? $4.1 billion worth. That's an increase of more than ten times in just ten years.

Is it inflation that's causing commodity prices to increase or is it the brand new demand of billions of people around the world who want the same fixed supply of stuff that we want?

 

[Red1966]

You're making the same mistake of using one price to calculate purchasing power. If people only bought bread and/or gasoline, you and Kynes would have a point. While some prices have gone up, other prices have gone down. When you net it all out, purchasing power today is the same or better at the median than in 1980. Calculating the tax burdens without deductions or credits, a single person earning $50,000 paid 16.6% of their income as federal income tax in 2013. A single person earning $17,000 paid 18.8% of their income as federal income tax in 1980. I'm guessing if we compared taxes with deductions and credits in both periods, the 1980 tax bill would be higher than the 2013 tax bill.

I made no mistake. His question was:"What's the difference between making $17,000 and paying 25 cents for bread versus making $50,000 and paying $2?". I answered a specific question with a specific (and correct) response. Why would you exclude deductions or credits when filing taxes? The tax rate in 1980 on $17,000 was 24% (http://www.stanford.edu/class/polisci120a/immigration/Federal Tax Brackets.pdf). I can assure you that no one paid that rate. I only paid about 10% in 1980 on a income higher than $17,000. (http://www.irs.gov/pub/irs-soi/80inintravmatr.pdf) "While some prices have gone up, other prices have gone down. When you net it all out, purchasing power today is the same or better at the median than in 1980." Sorry, but the first statement, while true, doesn't prove the second. The government varies the metrics used to calculate inflation, cherry picking what commodity prices are used to present the "statistics" they wish you to see. Their "statistics" are not only unreliable, they are actually intended to deceive. The best lies have a little bit of truth in them.

 

[tokeprep]

I made no mistake. His question was:"What's the difference between making $17,000 and paying 25 cents for bread versus making $50,000 and paying $2?". I answered a specific question with a specific (and correct) response. Why would you exclude deductions or credits when filing taxes? The tax rate in 1980 on $17,000 was 24% (http://www.stanford.edu/class/polisci120a/immigration/Federal Tax Brackets.pdf). I can assure you that no one paid that rate. I only paid about 10% in 1980 on a income higher than $17,000. (http://www.irs.gov/pub/irs-soi/80inintravmatr.pdf) "While some prices have gone up, other prices have gone down. When you net it all out, purchasing power today is the same or better at the median than in 1980." Sorry, but the first statement, while true, doesn't prove the second. The government varies the metrics used to calculate inflation, cherry picking what commodity prices are used to present the "statistics" they wish you to see. Their "statistics" are not only unreliable, they are actually intended to deceive. The best lies have a little bit of truth in them.

I excluded deductions and credits just because I didn't want to bother looking them up for 1980. If we worked deductions and credits out for both periods, I think you're going to find that the 2013 tax is lower as a percentage of income than the 1980 tax. No one paid 24% on $17,000 because that rate is only applicable above $16,000, with the other rates applicable to the income buckets below. The brackets are marginal rates.

If you want to argue about the government's inflation metrics, you're going to have to be specific instead of generally attacking them as unreliable. What's wrong with the CPI basket? What does it include that it shouldn't and what does it exclude that it shouldn't?

 

[heckler73]

If you want to argue about the government's inflation metrics, you're going to have to be specific instead of generally attacking them as unreliable. What's wrong with the CPI basket? What does it include that it shouldn't and what does it exclude that it shouldn't?

I was going to ask the same thing and also provide a link to the ILO CPI Manual so he could point out the particular sections which show HOW it is manipulated to deceive.
After all, Canada uses similar metrics based on the same manual along with many other developed countries.
I will admit there is room for fudging depending on the type of index method used (which I believe the ILO has discussed in past papers), but considering how many types of CPI the BLS puts out, such discrepancies can generally be sussed out.

So I am curious, too--much like when Peter Schiff decided to publish his stupid opinion on the matter by compiling his own cherry-picked basket of 20 items--to see how this metric is manipulated in Red's perspective.

He could be on to something. But as it stands, his opinion is seemingly parroted doom 'n gloom detritus.

 

[Harrekin]

I excluded deductions and credits just because I didn't want to bother looking them up for 1980. If we worked deductions and credits out for both periods, I think you're going to find that the 2013 tax is lower as a percentage of income than the 1980 tax. No one paid 24% on $17,000 because that rate is only applicable above $16,000, with the other rates applicable to the income buckets below. The brackets are marginal rates.

If you want to argue about the government's inflation metrics, you're going to have to be specific instead of generally attacking them as unreliable. What's wrong with the CPI basket? What does it include that it shouldn't and what does it exclude that it shouldn't?

Marginal rate comparisons only?

You're either retarded or you're depending on the retardedness of others.

I suspect the latter and suspect you're in the "financial game"...that silver tongue comes from nowhere else, we have an expression here: "you could sell sand to the Arabs".

 

[tokeprep]

Marginal rate comparisons only?

You're either retarded or you're depending on the retardedness of others.

I suspect the latter and suspect you're in the "financial game"...that silver tongue comes from nowhere else, we have an expression here: "you could sell sand to the Arabs".

Since the standard deduction in 2013 was far larger than the standard deduction in 1980, and there are more tax credits available now than in 1980, I don't understand why everyone thinks deductions and credits are going to make a difference in the result that favors 1980. That's why I ignored them.

 

[ChesusRice]

Since the standard deduction in 2013 was far larger than the standard deduction in 1980, and there are more tax credits available now than in 1980, I don't understand why everyone thinks deductions and credits are going to make a difference in the result that favors 1980. That's why I ignored them.

IN 1980 you could deduct credit card interest. Something many middle class people did. So Reagan had that deduction ended. In 2013 you can deduct mortgage interest from your taxes. Something most middle class people do that own homes. And yet again IT is one of the "tax Loopholes" that Ryan and Romney want to get rid of.

Fuck the Republicans.

 

[tokeprep]

IN 1980 you could deduct credit card interest. Something many middle class people did. So Reagan had that deduction ended. In 2013 you can deduct mortgage interest from your taxes. Something most middle class people do that own homes. And yet again IT is one of the "tax Loopholes" that Ryan and Romney want to get rid of.

Fuck the Republicans.

The original assertion here was that someone in 1980 paid less tax than someone in 2013 with a comparable income. Whether that's true or not is quite complicated. Are we talking about a single person or a married person with three dependents? Did they take the standard deduction or did they itemize?

On credit card interest specifically, I doubt that was a substantial deduction in 1980. Only a slight majority of people even had one credit card, and the average debt on the card was relatively low. Even with a high interest rate, the deduction would have been less than $200 on average.

 

[ChesusRice]

The original assertion here was that someone in 1980 paid less tax than someone in 2013 with a comparable income. Whether that's true or not is quite complicated. Are we talking about a single person or a married person with three dependents? Did they take the standard deduction or did they itemize?

On credit card interest specifically, I doubt that was a substantial deduction in 1980. Only a slight majority of people even had one credit card, and the average debt on the card was relatively low. Even with a high interest rate, the deduction would have been less than $200 on average.

You would be wrong

"On Oct. 22, 1986, President Ronald Reagan signed into law the Tax
Reform Act of 1986. Reagan called the 829-page, 33-pound bill 'the most
sweeping overhaul of the tax code in our nation's history.'

"The new code gradually phased out all deductions for interest paid on
car loans, charge-account purchases, vacations and anything else that
fell under what the law termed 'consumer loans.'

 

[tokeprep]

You would be wrong

"On Oct. 22, 1986, President Ronald Reagan signed into law the Tax
Reform Act of 1986. Reagan called the 829-page, 33-pound bill 'the most
sweeping overhaul of the tax code in our nation's history.'

"The new code gradually phased out all deductions for interest paid on
car loans, charge-account purchases, vacations and anything else that
fell under what the law termed 'consumer loans.'

I didn't contradict your claim that the deduction was eliminated. I said that because only half the people in the country had a credit card and because the average balance in 1980 was under $600 the deduction for credit card interest would be very small. Everything I said was absolutely correct.

 

[ChesusRice]

I didn't contradict your claim that the deduction was eliminated. I said that because only half the people in the country had a credit card and because the average balance in 1980 was under $600 the deduction for credit card interest would be very small. Everything I said was absolutely correct.

1 adjust for inflation
2 credit cards were very popular in the 80s

 

[tokeprep]

1 adjust for inflation
2 credit cards were very popular in the 80s

In 1980, 56% of Americans had at least one credit card versus more than 80% today. Even adjusting for inflation, the 1980 balance is about $1650 in 2012 dollars. The average credit card debt per household in 2013 was over $7000. Conclusions: the majority of people paid no credit card interest in 1980 and couldn't have taken this deduction (since only a portion with a card used it, and an even smaller portion actually held a monthly balance); even those who did pay interest probably wouldn't have itemized and taken the credit card plus other deductions over the standard deduction; even for the people who did take the deduction, it would have been relatively small, even at an APR of 20% or 25%.

 

[ChesusRice]

In 1980, 56% of Americans had at least one credit card versus more than 80% today. Even adjusting for inflation, the 1980 balance is about $1650 in 2012 dollars. The average credit card debt per household in 2013 was over $7000. Conclusions: the majority of people paid no credit card interest in 1980 and couldn't have taken this deduction (since only a portion with a card used it, and an even smaller portion actually held a monthly balance); even those who did pay interest probably wouldn't have itemized and taken the credit card plus other deductions over the standard deduction; even for the people who did take the deduction, it would have been relatively small, even at an APR of 20% or 25%.

 

[ChesusRice]

In 1980, 56% of Americans had at least one credit card versus more than 80% today. Even adjusting for inflation, the 1980 balance is about $1650 in 2012 dollars. The average credit card debt per household in 2013 was over $7000. Conclusions: the majority of people paid no credit card interest in 1980 and couldn't have taken this deduction (since only a portion with a card used it, and an even smaller portion actually held a monthly balance); even those who did pay interest probably wouldn't have itemized and taken the credit card plus other deductions over the standard deduction; even for the people who did take the deduction, it would have been relatively small, even at an APR of 20% or 25%.

 

[tokeprep]

Are these charts supposed to be making your point somehow?

 

[Red1966]

I excluded deductions and credits just because I didn't want to bother looking them up for 1980. If we worked deductions and credits out for both periods, I think you're going to find that the 2013 tax is lower as a percentage of income than the 1980 tax. No one paid 24% on $17,000 because that rate is only applicable above $16,000, with the other rates applicable to the income buckets below. The brackets are marginal rates. If you want to argue about the government's inflation metrics, you're going to have to be specific instead of generally attacking them as unreliable. What's wrong with the CPI basket? What does it include that it shouldn't and what does it exclude that it shouldn't?

They change what's in the CPI basket to get the results they want. So the metrics are different every time they publish it. That in itself makes it unreliable. Excluding gasoline and food prices flies in the face of logic and reality.

 

[ChesusRice]

They change what's in the CPI basket to get the results they want. So the metrics are different every time they publish it. That in itself makes it unreliable. Excluding gasoline and food prices flies in the face of logic and reality.

There was a gold bubble in the 80s comparable to what we have now
And gold bugs were bitch slapped eventually as well

 

[tokeprep]

They change what's in the CPI basket to get the results they want. So the metrics are different every time they publish it. That in itself makes it unreliable. Excluding gasoline and food prices flies in the face of logic and reality.

You can't point out a specific example or two of the CPI basket being changed to hide a "bad" inflation result? The basket certainly gets changed, but that's because consumer behavior changes. Should the inflation rate be based on what consumers bought 100 years ago or should it be based on what they buy now? Only the latter makes any sense.

Gasoline and food prices are only excluded from core CPI. There are several other CPI numbers that include both. So the government agrees with you: it would fly in the face of logic and reality to totally ignore gasoline and food prices, and that's why they don't.

 

[Red1966]

There was a gold bubble in the 80s comparable to what we have now And gold bugs were bitch slapped eventually as well

I think they're still getting bitch slapped. Every time I look, the price of gold keeps falling.

 

[Red1966]

You can't point out a specific example or two of the CPI basket being changed to hide a "bad" inflation result? The basket certainly gets changed, but that's because consumer behavior changes. Should the inflation rate be based on what consumers bought 100 years ago or should it be based on what they buy now? Only the latter makes any sense. Gasoline and food prices are only excluded from core CPI. There are several other CPI numbers that include both. So the government agrees with you: it would fly in the face of logic and reality to totally ignore gasoline and food prices, and that's why they don't.

Ever hear them quote anything but the core CPI? They don't base it on what consumers buy, the goods consumers buy doesn't change every year like the CPI does. Now they want to base Social Security cost of living increases on a CPI that assumes when products get more expensive, consumers will buy alternatives that cost less. Like giving up steak for hamburger, giving up hamburger for baloney, giving up baloney for cat food, giving up cat food for tree bark, giving up tree bark for eating your children. We may all be starving, but the CPI says nothing has changed. You can't claim metrics based on different units of measure every time you calculate them are in any way an accurate measure of reality.