Being unemployed has caused its fair share of complications. But not the ones I was initially worried about.
Money's not tight, yet. I'm not going stir crazy (my wife may beg to differ). And the "worthless, unemployed loser" has subsided, a bit.
The scariest part about being unemployed is I'm almost enjoying it. I knew I was unhappy in my previous position but I am starting to realize the mental toll it was taking on my life. My stress level had gotten so high that I don't think I ever came down. I would spend all day Saturday gradually coming down from the never-ending drama of the work week, never fully letting it go. And I would spend all Sunday ratcheting the stress level back up by worrying about things I needed to do in the coming week. And of course bringing work stress home with you is great for the whole household. I never found a way to give my brain a break. Rinse and repeat for four years and you get my mental state, as of a month ago.
I spent the first week of unemployment relaxing with my family. It was my son's spring break from school so I made a conscious effort to focus on family and leave the job hunt alone until the following week. It worked for a few days. I ended up applying for several jobs late that Friday under the guise that my resume would be waiting for the companies on Monday morning.
I got a response from an application for a job which listed qualifications a bit over my head. But I was excited. How great would it be to find a new job before I received my final paycheck from my previous job? Alas, this "job opportunity" turned out to be a staffing firm just wanting to get my information into their system. If the meeting had been presented as such I would not have hesitated to meet. But the correspondence was worded as though I was in consideration for this particular position. It was disappointing, to say the least. Nevertheless, the gentleman was incredibly personable and helpful, giving many suggestions about my resume.
I have since sent my resume to several more places and have made it through a phone interview and one in-person interview with one place. This company looks to be an ideal situation for me. Work smart, play hard. Is there a better motto than that?
(Update: Since writing the draft for this post I received a response from this company. Alas, I am apparently not what they are looking for at this time. That really hurts. I just wish I knew more about why. Was is something I said? Or didn't say? Do I not have the needed skills? Was I too reserved? Did I come on too strong? I have replayed the entire interview in my head dozens of times and still can't pinpoint the problem. I think this is how insanity begins.)
I'm struggling with my reaction to unemployed life. Weirdly, the emotion I feel most is guilt. For some reason I feel guilty that I'm not going insane. And I don't really understand that.
I filled out all the paperwork for unemployment benefits. All that's left is for me to check in every Monday to get the money. That was three weeks ago. I can't bring myself to do it. I have paid into the fund through my taxes for almost ten years. Why is it so hard for me to take money to which, by all legal accounts, I am entitled? It just feels dishonest to me. Unemployment payments should be for people struggling to feed, clothe, and shelter their family. I'm not there yet. To take money without really needing just feels like stealing. Add to this my feeling that taking something out of availability rather than necessity is what's killing humanity, and it makes it virtually impossible for me to accept unemployment benefits.
So I carry on, seeking my next employment opportunity, still trying to decide what I want to do with my life. I do not doubt my abilities. But I'm beginning to lose confidence in my professional focus. I want to do so many different things that I'm finding it incredibly difficult to look for jobs. I spend more time staring at a search prompt, trying to decide what phrase to use, than I do looking at actual job descriptions.
I'm in my late twenties. I'm supposed to at least have my career field narrowed down by now, right? I just want to go to work, feel like I'm contributing to society, and come home to my family. I don't want fortune and stock options. I don't seek titles and power.
I don't have a happy, concise ending to this rant. And I have no idea if it even makes any sense. But I guess that's the perfect metaphor for my life.
Tuesday, May 1, 2012
Sunday, March 18, 2012
Color Me Unemployed
I awoke yesterday morning to find myself in an unusual situation: unemployment. Friday afternoon I became the latest in a LONG line of Americans to lose their job due to cutbacks blamed on "the economy".
The Economy has been personified to such an extent that it has become the scapegoat for nearly any unfortunate circumstance.
Gas prices too high? It's the Economy. Underwater on your mortgage? It's that pesky Economy. Forced to switch to store-brand groceries? Man, the Economy is really out to get us.
Obviously the Economy is not some sentient mastermind hell-bent on destroying the lives of countless families and businesses. Its current iteration is the mutated offspring of widespread ignorance, incompetence, and malice prevalent throughout 1% and 99% alike. Most people don't lose their job as a direct result of this amoebic disruptor. From what I've seen, most job loses are the result of a company's inability and/or unwillingness to adapt to new parameters in the marketplace. I suspect this was the culprit in my case.
But I hold no grudge. I don't have a list of people I curse every night before I fall asleep. And I certainly do not wish further hardships on my former employer. Additional complications would only serve to hurt innocent bit players uninvolved in creating the hardships, with no recourse to change them.
Instead, I have found a long-forgotten inner-tranquillity. I have smiled more in the last day and half than I did in the previous month and a half. Discussing Lego Star Wars strategies with my son is the most important event on my daily agenda. I feel as if I am free to choose nearly any path I desire.
The obvious first thought would be to find another PC support position. However, I am still quite interested in continuing my web design self-education. Or maybe I want to focus on something entirely different. But even more than that I want to find a place where I am more than my job title. That statement may seem a bit cliché, but I think it's incredibly important.
Imagine a job where you are free to explore different areas of the business, seeking knowledge and collaboration from many different types of people with just as many different skill sets. How much more efficient would a company become if they began to seek input from all levels of the workforce? Crunching numbers in a boardroom to determine peak profit margin may be one tactic. But seeking input from an average warehouse worker may yield even greater benefits for laborer and boardmember alike.
It would be foolish to holdout for an available job at a company fully utilizing this approach. But finding a place that isn't afraid to hear unconventional ideas from unconventional places would be amazing.
So the job hunt begins. But not for a little while. After all, my son's spring break is next week. And a bit of father/son time may be exactly the thing I need to point me in the right direction.
The Economy has been personified to such an extent that it has become the scapegoat for nearly any unfortunate circumstance.
Gas prices too high? It's the Economy. Underwater on your mortgage? It's that pesky Economy. Forced to switch to store-brand groceries? Man, the Economy is really out to get us.
Obviously the Economy is not some sentient mastermind hell-bent on destroying the lives of countless families and businesses. Its current iteration is the mutated offspring of widespread ignorance, incompetence, and malice prevalent throughout 1% and 99% alike. Most people don't lose their job as a direct result of this amoebic disruptor. From what I've seen, most job loses are the result of a company's inability and/or unwillingness to adapt to new parameters in the marketplace. I suspect this was the culprit in my case.
But I hold no grudge. I don't have a list of people I curse every night before I fall asleep. And I certainly do not wish further hardships on my former employer. Additional complications would only serve to hurt innocent bit players uninvolved in creating the hardships, with no recourse to change them.
Instead, I have found a long-forgotten inner-tranquillity. I have smiled more in the last day and half than I did in the previous month and a half. Discussing Lego Star Wars strategies with my son is the most important event on my daily agenda. I feel as if I am free to choose nearly any path I desire.
The obvious first thought would be to find another PC support position. However, I am still quite interested in continuing my web design self-education. Or maybe I want to focus on something entirely different. But even more than that I want to find a place where I am more than my job title. That statement may seem a bit cliché, but I think it's incredibly important.
Imagine a job where you are free to explore different areas of the business, seeking knowledge and collaboration from many different types of people with just as many different skill sets. How much more efficient would a company become if they began to seek input from all levels of the workforce? Crunching numbers in a boardroom to determine peak profit margin may be one tactic. But seeking input from an average warehouse worker may yield even greater benefits for laborer and boardmember alike.
It would be foolish to holdout for an available job at a company fully utilizing this approach. But finding a place that isn't afraid to hear unconventional ideas from unconventional places would be amazing.
So the job hunt begins. But not for a little while. After all, my son's spring break is next week. And a bit of father/son time may be exactly the thing I need to point me in the right direction.
Friday, February 10, 2012
My Kid is Broken?
I don't have a fancy article as a trigger for this rant. I just have the ridiculous situation surrounding my son's education.
My son is not an "easy" child. He asks insane questions, is obsessed with LEGO and science fiction, and constantly questions authority figures' motives. None of these are bad things. He also comes out with spurts of simplistic brilliance.
In a discussion about the oil spills in the Gulf of Mexico and the Exxon Valdez, the following exchange occurs:
My son: "If oil is so bad, why do we still use it?"
Me: "We need it to power cars and lawn mowers and a thousand other things."
My son: "Why don't we just make those things use something other than oil?"
I don't have a legitimate answer for this. I could go into the manufacturing costs for electric cars, the mileage limits of purely electric cars, or the belief that car manufacturers themselves are half-assing the effort in an attempt to appease the oil companies. But none of those strike me as valid excuses.
Rather than accepting the parameters of the problem, he seeks to change the variables in search of a real solution. In two sentences, my son has questioned the motives behind one of the biggest future problems our country is facing. He has a way of stripping away superfluous information and seeing the core issue. He is never satisfied with accepting excuses. And I LOVE him for it.
The best piece of advice I have ever received came from my father when I was not much older than my son is right now. He said "Believe whatever you want. But believe it because YOU believe it. Not because of what someone else said." I can't think of a better piece of advice for a young man. Except maybe "If you get her pregnant, you better love her", which my father also said. My father's soundbites strike me as something a taller, less green, slightly younger Yoda would say to his son. Full of wisdom with enough edge to make you remember.
I try to teach my son the same principles. However, when he gets stuck with an aging teacher, burnt-out on years of 8 year-olds, intent on forcing her students into the neat little mold she deems acceptable, he naturally struggles against it. And he is consequently treated like he's damaged or broken.
His desire to seek the core truths has been stifled because it's seen as being disruptive. Asking numerous questions DIRECTLY relating to the subject material is apparently disruptive behavior now. And forget about trying to talk to a classmate about the current assignment. There will be absolutely no collaboration in this "learning" environment.
His love of reading books several levels above him has been all but destroyed by daily, forced reading of books well below his level. It's the same concept as telling an ice cream lover that they are now required to eat ice cream everyday. No matter what you love, if that behavior becomes a requirement then it loses all appeal.
(By the way, his class goes to the library one day every three weeks. We have plenty of books at home but what about the kids who don't? Or the kids who are struggling to reach their grade level? Making them wait three weeks between class visits to a library is insanity. It's the same three week rotation with music and art classes. Music, art, and literature are what make us human. But they have been all but abandoned as priorities in American public schools.)
His emotional responses to what he sees as injustice are regarded as overly-aggressive, inflammatory behavior. When he is reprimanded in front of the class for something as innocuous as tapping his pencil while doing his work (WHILE DOING HIS WORK) he tries to explain his actions. Which is then seen as questioning authority and deserving of a second, public reprimand.
He cannot physically comprehend bullshit. This is his greatest asset and weakness. That being said, I am not worried about my son.
I'm worried about the people around him. He is an engaging, passionate, awe-inspiring human with a laser beam focus toward whatever his current obsession may be. And he's seven years old. If he can maintain this mindset while adding experience, education, and maturity then he will be an outstanding adult. But if his creativity and desire to learn are sabotaged by misguided attempts to herd him into more "acceptable" behaviors and interests then society will have destroyed another brilliant mind.
My son is not a colt who needs to be broken before he can reach his full potential. He is a sapling who needs firm foundation and support as well as plenty of room to grow in any way he chooses fit.
I love my son. He's not damaged or broken. He is a real human with real human desires and emotions. And I hope he can stay that way.
My son is not an "easy" child. He asks insane questions, is obsessed with LEGO and science fiction, and constantly questions authority figures' motives. None of these are bad things. He also comes out with spurts of simplistic brilliance.
In a discussion about the oil spills in the Gulf of Mexico and the Exxon Valdez, the following exchange occurs:
My son: "If oil is so bad, why do we still use it?"
Me: "We need it to power cars and lawn mowers and a thousand other things."
My son: "Why don't we just make those things use something other than oil?"
I don't have a legitimate answer for this. I could go into the manufacturing costs for electric cars, the mileage limits of purely electric cars, or the belief that car manufacturers themselves are half-assing the effort in an attempt to appease the oil companies. But none of those strike me as valid excuses.
Rather than accepting the parameters of the problem, he seeks to change the variables in search of a real solution. In two sentences, my son has questioned the motives behind one of the biggest future problems our country is facing. He has a way of stripping away superfluous information and seeing the core issue. He is never satisfied with accepting excuses. And I LOVE him for it.
The best piece of advice I have ever received came from my father when I was not much older than my son is right now. He said "Believe whatever you want. But believe it because YOU believe it. Not because of what someone else said." I can't think of a better piece of advice for a young man. Except maybe "If you get her pregnant, you better love her", which my father also said. My father's soundbites strike me as something a taller, less green, slightly younger Yoda would say to his son. Full of wisdom with enough edge to make you remember.
I try to teach my son the same principles. However, when he gets stuck with an aging teacher, burnt-out on years of 8 year-olds, intent on forcing her students into the neat little mold she deems acceptable, he naturally struggles against it. And he is consequently treated like he's damaged or broken.
His desire to seek the core truths has been stifled because it's seen as being disruptive. Asking numerous questions DIRECTLY relating to the subject material is apparently disruptive behavior now. And forget about trying to talk to a classmate about the current assignment. There will be absolutely no collaboration in this "learning" environment.
His love of reading books several levels above him has been all but destroyed by daily, forced reading of books well below his level. It's the same concept as telling an ice cream lover that they are now required to eat ice cream everyday. No matter what you love, if that behavior becomes a requirement then it loses all appeal.
(By the way, his class goes to the library one day every three weeks. We have plenty of books at home but what about the kids who don't? Or the kids who are struggling to reach their grade level? Making them wait three weeks between class visits to a library is insanity. It's the same three week rotation with music and art classes. Music, art, and literature are what make us human. But they have been all but abandoned as priorities in American public schools.)
His emotional responses to what he sees as injustice are regarded as overly-aggressive, inflammatory behavior. When he is reprimanded in front of the class for something as innocuous as tapping his pencil while doing his work (WHILE DOING HIS WORK) he tries to explain his actions. Which is then seen as questioning authority and deserving of a second, public reprimand.
He cannot physically comprehend bullshit. This is his greatest asset and weakness. That being said, I am not worried about my son.
I'm worried about the people around him. He is an engaging, passionate, awe-inspiring human with a laser beam focus toward whatever his current obsession may be. And he's seven years old. If he can maintain this mindset while adding experience, education, and maturity then he will be an outstanding adult. But if his creativity and desire to learn are sabotaged by misguided attempts to herd him into more "acceptable" behaviors and interests then society will have destroyed another brilliant mind.
My son is not a colt who needs to be broken before he can reach his full potential. He is a sapling who needs firm foundation and support as well as plenty of room to grow in any way he chooses fit.
I love my son. He's not damaged or broken. He is a real human with real human desires and emotions. And I hope he can stay that way.
Tuesday, January 17, 2012
New Year, New Plan
Last year I set out to lose 100 pounds. I ended up losing 33. Were I a first baseman, this type of success rate could land me a $240 million deal. While I am disappointed I didn't reach even 50% of my goal I also realize I didn't give even 50% of my available effort. Half-assing your effort to halve your ass leads to disappointment.
Last year I sought to have less of me around. This year I seek to have less around me.
I have entirely too many "things". I am overwhelmed with an abundance of things I have used once and never touched again. I condemn billionaires for spending their 8 figure bonus checks on vacation homes and luxury yachts but at least they use those lavish purchases and reap continued enjoyment from them. Meanwhile, I'll buy a $60 video game, play it for 10 hours, and then never touch it again. In that perspective, my actions are more wasteful than purchasing a third vacation home.
My home became a cable-free household last summer. Paying $80/month for ignorant tripe to be spewed at me and my family just sounded crazy when we stepped back to think about it. There are many entertaining, intelligent, and worthwhile things on television that provide enjoyment and education. But I don't think we were getting anywhere near $80 worth of that every month. And once you decide that the product you receive is not worth the price you pay it becomes extremely difficult to continue justifying the purchase.
It started as a money-saving experiment. It has evolved into a liberating experience, at least for me. Keeping up with shows I enjoy no longer feels like an obligation. Our main sources of visual entertainment have become Netflix and Hulu Plus. These cost us a combined $15.98/month and I think we get more than our money's worth from each.
It has not been without complications, however. I have always had cable and therefore have always had access to sports coverage. In previous years, I estimate I would watch no less than 100 football games a season, between college and NFL. This year I may have watched ten. Being a Cowboys fan, I got to tune into four of their games this year via NBC's streaming of their Sunday Night Football coverage...and see them lose all four. Such is the life of a Cowboys fan.
Having less to watch gave us more to do. This is the basic foundation of my goal for this year: I want to get rid a large portion of my things. I was inspired by Sean Bonner and his "Year of Less". His goals are to limit purchases to one per month and to get rid of one thing every day this year. This sounds intoxicating to me.
In this spirit, my wife and I spent a few hours going through our closet last weekend. It was....messy. (I don't even know how to describe it. Picture the trash compactor from A New Hope and add hanging clothes to the walls.) We ended up filling six garbage bags with clothes to donate. And we only stopped because we didn't want to start on the drawers that day. We didn't even start with the kids' clothes.
Two humans gave away six garbage bags full of clothes and we still had 3 times as much as we needed. I was extremely angry at myself for having so many things that I neither wanted nor needed yet kept. I estimate at least 100 items were in those bags. Some with tags still on them. Many more never actually worn.
I will be joining Mr. Bonner in his quest to eliminate one thing everyday. Because of the children, I will have to modify the one purchase per month rule to apply only to things for myself. But I intend to stand by that as well.
I am going to let the clothes count for the month of January. Starting February 1st I plan to eliminate one item from my life everyday for the rest of the year. Computer parts, books, movies, more clothes, or whatever else is taking up space but not being used. Theoretically, I will keep track of these items, since I obviously tracked my weight goal so well last year. And throwing away broken things doesn't count, but it will be a nice bonus to get rid of that crap, too.
I am hoping this will alleviate some of the clutter around the house and help me appreciate and enjoy the things I choose to keep.
Last year I sought to have less of me around. This year I seek to have less around me.
I have entirely too many "things". I am overwhelmed with an abundance of things I have used once and never touched again. I condemn billionaires for spending their 8 figure bonus checks on vacation homes and luxury yachts but at least they use those lavish purchases and reap continued enjoyment from them. Meanwhile, I'll buy a $60 video game, play it for 10 hours, and then never touch it again. In that perspective, my actions are more wasteful than purchasing a third vacation home.
________________________
My home became a cable-free household last summer. Paying $80/month for ignorant tripe to be spewed at me and my family just sounded crazy when we stepped back to think about it. There are many entertaining, intelligent, and worthwhile things on television that provide enjoyment and education. But I don't think we were getting anywhere near $80 worth of that every month. And once you decide that the product you receive is not worth the price you pay it becomes extremely difficult to continue justifying the purchase.
It started as a money-saving experiment. It has evolved into a liberating experience, at least for me. Keeping up with shows I enjoy no longer feels like an obligation. Our main sources of visual entertainment have become Netflix and Hulu Plus. These cost us a combined $15.98/month and I think we get more than our money's worth from each.
It has not been without complications, however. I have always had cable and therefore have always had access to sports coverage. In previous years, I estimate I would watch no less than 100 football games a season, between college and NFL. This year I may have watched ten. Being a Cowboys fan, I got to tune into four of their games this year via NBC's streaming of their Sunday Night Football coverage...and see them lose all four. Such is the life of a Cowboys fan.
Having less to watch gave us more to do. This is the basic foundation of my goal for this year: I want to get rid a large portion of my things. I was inspired by Sean Bonner and his "Year of Less". His goals are to limit purchases to one per month and to get rid of one thing every day this year. This sounds intoxicating to me.
In this spirit, my wife and I spent a few hours going through our closet last weekend. It was....messy. (I don't even know how to describe it. Picture the trash compactor from A New Hope and add hanging clothes to the walls.) We ended up filling six garbage bags with clothes to donate. And we only stopped because we didn't want to start on the drawers that day. We didn't even start with the kids' clothes.
Two humans gave away six garbage bags full of clothes and we still had 3 times as much as we needed. I was extremely angry at myself for having so many things that I neither wanted nor needed yet kept. I estimate at least 100 items were in those bags. Some with tags still on them. Many more never actually worn.
I will be joining Mr. Bonner in his quest to eliminate one thing everyday. Because of the children, I will have to modify the one purchase per month rule to apply only to things for myself. But I intend to stand by that as well.
I am going to let the clothes count for the month of January. Starting February 1st I plan to eliminate one item from my life everyday for the rest of the year. Computer parts, books, movies, more clothes, or whatever else is taking up space but not being used. Theoretically, I will keep track of these items, since I obviously tracked my weight goal so well last year. And throwing away broken things doesn't count, but it will be a nice bonus to get rid of that crap, too.
I am hoping this will alleviate some of the clutter around the house and help me appreciate and enjoy the things I choose to keep.
Monday, January 9, 2012
Bankers and Imbeciles 2.0
The Thursday before Christmas I posted a blog dealing with Bloomberg's report of various bankers and billionaires' comments about the surging 99% vs. 1% sentiment growing across the nation. Their arrogant and dismissive attitudes enraged me. In my attempt to show how their "1%" continues to grow while our "99%" steadily declines I did an examination of average household income vs. inflation rate from 1979-2007. This showed that while average household income increased 62% during the 28 year period, the inflation rate rose a staggering 318%.
Along the same lines, this morning I came across a report from The Society Pages detailing the relationship between the minimum wage and the nominal value of that wage. It compares a workers' actual hourly rate of pay versus the value of that dollar after many factors, including inflation, are taken into account, determined by the purchasing power of a dollar earned in 2010. It's a pretty dramatic look at how wage increases are not keeping up with inflation increases.
(http://thesocietypages.org/socimages/2012/01/07/the-minimum-wage-and-capitalism-2/)
If you look at the chart you'll see that a dollar's purchasing power appears to be greatest between from 1964-1980. If you match that up with the tax rates during those years you'll see some correlating numbers.
From 1950-1963, the 14 years prior to the highest purchasing power, the tax rate on income above $400,000 was 91%, with the exception of 1952-53 when it was actually 92%! The chart above shows a dramatic upturn in the purchasing power of a dollar during this 14 year time span. I believe the high point of purchasing power I highlighted early, 1964-1980, is a direct result of this sustained tax rate. It insured reinvestment into the infrastructure that facilitated the enormous growth of the United States. It also prevented wealthy Americans from reaping financial benefits on their climb toward wealth and then "cashing out" and denying that chance for the next generation. Without this continued reinvestment of tax dollars it would have been impossible to maintain the governmental investments and incentives for the creation of new businesses and opportunities.
The tax rates, for the lowest and highest income brackets, for those 17 years of high purchasing power are as follows:
This appears to be a time of great prosperity for the American Dollar. So what happened to push it toward our current dysfunctional system?
Well, inflation rates were above 10% each year from 1979-81. That meant that, on average, goods cost 39% more at the end of 1981 than they did at the beginning of 1979. So to combat this our government surely sought to revert to our more prosperous techniques of the past, with respects to tax rates, by asking wealthy Americans to pay a little extra so that the people who needed money to afford things like food and shelter were able to keep a few more dollars each month, right?
They actually did the opposite. Here's the data from the same chart for the rest of the 1980s:
These charts show only the bottom tax bracket and the top tax bracket. Most years there are several brackets in between with gradual increases in rates but some years these represent the only two brackets.
So, let's try to make sense of this and compare apples to apples. Brace yourself. An abundance of numbers will be used. I will be using tax rates for a single man with no children from this chart.
Let's take a single man making $40,000 per year and assume he maintained this wage from 1981-1989 with no raise. His tax liability, not including deductions or credits, in 1981 would be $12,000, at a rate of 30%. That same man's tax liability in 1989 would be $11,200, at a rate of 28%.
Take-home pay 1981: $28,000.
Take-home pay 1989: $28,800.
Hey, way to go! This fortunate man got to keep $800 more of his money.
But keep in mind, the inflation rate over this nine year period works out to just over 50%. So if this man's monthly bills in 1981 were $1000, his same bills in 1989 would be $1500. Sorry, pal. It doesn't look like that $800 drop in annual tax liability is going to offset the extra $6000 ($500 * 12 months) you'll be paying on your bills. You actually come out $5200 worse. Let's hope you got annual raises enough to cover this.
IF(!) he got a 2% annual raise EVERY year, his 1989 wage would be $46,866. Factoring in inflation and tax rate changes, he comes out $1666 better in 1989, after bills and taxes, than he did in 1981. Assuming this guy has a generous employer, and hasn't added any expenses (like children), he's not doing too badly.
Now let's look at a man making $1,000,000 per year over this same period. His tax liability in 1981 would be $691,250, at a rate of 69.125%. The same man would pay taxes of $280,000 in 1989, at a rate of 28%.
Take-home pay 1981: $308,750.
Take-home pay 1989: $720,000.
Wow!
Let's say his bills are TEN times the previous man's bills. That means that monthly bills of $10,000 in 1981 would be roughly $15,000 in 1989, after factoring in inflation. Meaning he would pay $411,250 LESS in taxes and $60,000 ($5,000 * 12 months) more in expenses. With no raise at all, this man comes out $351,250 better in 1989.
If you factor in an annual 2% raise (new salary $1,171,659), this man comes out $522,909 better in 1989, after bills and taxes, than he did in 1981.
That's a lot of numbers but here's what it boils down to: After bills and taxes, the first man increased his yearly income by just over 4% while the millionaire increased his yearly income by just over 52% during the same time period.
Wait. 28% tax rate in 1989? Isn't that the same rate as the guy making $40,000? Yes, it was. The tax rates for the wealthy from 1988-92 and 2003-2011 were literally HALF what they were from 1936-1981. The rates from 93-2002 were merely 44% lower. AND, from 1988-90 anyone making over $19,450 paid the same tax rate. A person making $20,000 paid the same tax rate as a person making $20,000,000. That sounds absurd to me.
Fun Fact: Prior to 1987, the last time tax rates for the top bracket were below 50% was 1925-1931. Check those years, and their aftermath, if you need help figuring out what broken policy can create.
My point is this: Our current system is completely unsustainable. If we continue to allow inflation to rise much faster than wages we will end up with a country full of people completely dependent on their government for assistance. If we simultaneously allow millionaires and billionaires to hide their income and pay unbelievably, historically low tax rates, then the government will be in no position to offer any help to those who have slowly been robbed of their financial security, their buying power, their self-sufficiency, and eventually their dignity.
I don't want socialism. I don't want to rob from the rich and give to the poor. I want a country with sustainable policies. And we don't have that right now.
Along the same lines, this morning I came across a report from The Society Pages detailing the relationship between the minimum wage and the nominal value of that wage. It compares a workers' actual hourly rate of pay versus the value of that dollar after many factors, including inflation, are taken into account, determined by the purchasing power of a dollar earned in 2010. It's a pretty dramatic look at how wage increases are not keeping up with inflation increases.
(http://thesocietypages.org/socimages/2012/01/07/the-minimum-wage-and-capitalism-2/)
If you look at the chart you'll see that a dollar's purchasing power appears to be greatest between from 1964-1980. If you match that up with the tax rates during those years you'll see some correlating numbers.
From 1950-1963, the 14 years prior to the highest purchasing power, the tax rate on income above $400,000 was 91%, with the exception of 1952-53 when it was actually 92%! The chart above shows a dramatic upturn in the purchasing power of a dollar during this 14 year time span. I believe the high point of purchasing power I highlighted early, 1964-1980, is a direct result of this sustained tax rate. It insured reinvestment into the infrastructure that facilitated the enormous growth of the United States. It also prevented wealthy Americans from reaping financial benefits on their climb toward wealth and then "cashing out" and denying that chance for the next generation. Without this continued reinvestment of tax dollars it would have been impossible to maintain the governmental investments and incentives for the creation of new businesses and opportunities.
The tax rates, for the lowest and highest income brackets, for those 17 years of high purchasing power are as follows:
Tax Rates | ||||
Bottom bracket
|
Top bracket
| |||
| Calendar Year |
Rate
(percent) |
Taxable Income Up to
|
Rate
(percent) |
Taxable
Income over |
| 1964 | 16 | 1,000 | 77 | 400,000 |
| 1965-67 | 14 | 1,000 | 70 | 200,000 |
| 1968 | 14 | 1,000 | 75.25 | 200,000 |
| 1969 | 14 | 1,000 | 77 | 200,000 |
| 1970 | 14 | 1,000 | 71.75 | 200,000 |
| 1971 | 14 | 1,000 | 70 | 200,000 |
| 1972-78 | 14 | 1,000 | 70 | 200,000 |
| 1979-80 | 14 | 2,100 | 70 | 212,000 |
| 1981 | 13.825 | 2,100 | 69.125 | 212,000 |
This appears to be a time of great prosperity for the American Dollar. So what happened to push it toward our current dysfunctional system?
Well, inflation rates were above 10% each year from 1979-81. That meant that, on average, goods cost 39% more at the end of 1981 than they did at the beginning of 1979. So to combat this our government surely sought to revert to our more prosperous techniques of the past, with respects to tax rates, by asking wealthy Americans to pay a little extra so that the people who needed money to afford things like food and shelter were able to keep a few more dollars each month, right?
They actually did the opposite. Here's the data from the same chart for the rest of the 1980s:
Tax Rates | ||||
Bottom bracket
|
Top bracket
| |||
| Calendar Year |
Rate
(percent) |
Taxable Income Up to
|
Rate
(percent) |
Taxable
Income over |
| 1982 | 12 | 2,100 | 50 | 106,000 |
| 1983 | 11 | 2,100 | 50 | 106,000 |
| 1984 | 11 | 2,100 | 50 | 159,000 |
| 1985 | 11 | 2,180 | 50 | 165,480 |
| 1986 | 11 | 2,270 | 50 | 171,580 |
| 1987 | 11 | 3,000 | 38.5 | 90,000 |
| 1988 | 15 | 29,750 | 28 | 29,750 |
| 1989 | 15 | 30,950 | 28 | 30,950 |
These charts show only the bottom tax bracket and the top tax bracket. Most years there are several brackets in between with gradual increases in rates but some years these represent the only two brackets.
So, let's try to make sense of this and compare apples to apples. Brace yourself. An abundance of numbers will be used. I will be using tax rates for a single man with no children from this chart.
Let's take a single man making $40,000 per year and assume he maintained this wage from 1981-1989 with no raise. His tax liability, not including deductions or credits, in 1981 would be $12,000, at a rate of 30%. That same man's tax liability in 1989 would be $11,200, at a rate of 28%.
Take-home pay 1981: $28,000.
Take-home pay 1989: $28,800.
Hey, way to go! This fortunate man got to keep $800 more of his money.
But keep in mind, the inflation rate over this nine year period works out to just over 50%. So if this man's monthly bills in 1981 were $1000, his same bills in 1989 would be $1500. Sorry, pal. It doesn't look like that $800 drop in annual tax liability is going to offset the extra $6000 ($500 * 12 months) you'll be paying on your bills. You actually come out $5200 worse. Let's hope you got annual raises enough to cover this.
IF(!) he got a 2% annual raise EVERY year, his 1989 wage would be $46,866. Factoring in inflation and tax rate changes, he comes out $1666 better in 1989, after bills and taxes, than he did in 1981. Assuming this guy has a generous employer, and hasn't added any expenses (like children), he's not doing too badly.
Now let's look at a man making $1,000,000 per year over this same period. His tax liability in 1981 would be $691,250, at a rate of 69.125%. The same man would pay taxes of $280,000 in 1989, at a rate of 28%.
Take-home pay 1981: $308,750.
Take-home pay 1989: $720,000.
Wow!
Let's say his bills are TEN times the previous man's bills. That means that monthly bills of $10,000 in 1981 would be roughly $15,000 in 1989, after factoring in inflation. Meaning he would pay $411,250 LESS in taxes and $60,000 ($5,000 * 12 months) more in expenses. With no raise at all, this man comes out $351,250 better in 1989.
If you factor in an annual 2% raise (new salary $1,171,659), this man comes out $522,909 better in 1989, after bills and taxes, than he did in 1981.
That's a lot of numbers but here's what it boils down to: After bills and taxes, the first man increased his yearly income by just over 4% while the millionaire increased his yearly income by just over 52% during the same time period.
Wait. 28% tax rate in 1989? Isn't that the same rate as the guy making $40,000? Yes, it was. The tax rates for the wealthy from 1988-92 and 2003-2011 were literally HALF what they were from 1936-1981. The rates from 93-2002 were merely 44% lower. AND, from 1988-90 anyone making over $19,450 paid the same tax rate. A person making $20,000 paid the same tax rate as a person making $20,000,000. That sounds absurd to me.
Fun Fact: Prior to 1987, the last time tax rates for the top bracket were below 50% was 1925-1931. Check those years, and their aftermath, if you need help figuring out what broken policy can create.
My point is this: Our current system is completely unsustainable. If we continue to allow inflation to rise much faster than wages we will end up with a country full of people completely dependent on their government for assistance. If we simultaneously allow millionaires and billionaires to hide their income and pay unbelievably, historically low tax rates, then the government will be in no position to offer any help to those who have slowly been robbed of their financial security, their buying power, their self-sufficiency, and eventually their dignity.
I don't want socialism. I don't want to rob from the rich and give to the poor. I want a country with sustainable policies. And we don't have that right now.
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