Counterparties

By Felix Salmon
February 19, 2010
WSJ

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Paterson is even more useless than I’d thought — NYT

Crap tax law implicated in Austin terror-suicide: it’s not the IRS’s fault, it’s Congress — NYT

Wherein Blodget turns my tweet into a fully-fledged CONTEST — TBI

Valentino vs. September Issue — Black Von

Go read Paul on security theatre. Hilarious — Kedrosky

Must-read piece in the American Conservative on hispanics and crime. Fantastic stuff — AmCon

The top 400 taxpayers all earn at least $138m per year. Their average tax rate? 16.6% — WSJ

6 comments

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The “crap” tax law (your word, I believe) cited by the NYT essentially says that if you work for a company on a daily basis, and they provide you with desk and computer, and are in general act like other company employees, you must also be an employee. That’s not particularly radical. In practice, what developed were “body shops,” where a staffing firm would hire you as an employee, then contract you out to a company over a period of time. You won’t get rich doing that, but you will make a good living.

However, there are also plenty of independent software people who have their own one-person firms, have multiple clients, provide their own equipment, and are in general troubleshooters or skilled in a particular specialty. This is what I do. It can be lucrative, but I’ve known very few who have become wealthy doing so. You’re still only selling your time, after all, and there is a finite amount of that. It depends on your skills (including people skills), business acumen, and a measure of luck.

It’s not a route to wealth, any more than any other approach to working, but rather a lifestyle choice. To say that this law has ruined people’s careers is simply ridiculous. And it’s certainly not a reason to commit suicide and take others with you.

Posted by Curmudgeon | Report as abusive

“The top 400 taxpayers all earn at least $138m per year. Their average tax rate? 16.6%”

Well, that will change in 2011 with long term capital gains tax rising to 20%. But the percentages are sort of misleading. 16% of $138M is roughly $22M. That’s about 500x what I am paying in taxes.

Even more impressive is that these 438 extremely generous people are paying 2% of the total revenue from individuals. That’s not an insignificant amount of money being contributed to the rest of us.

Thanks, rich dudes.

Posted by mattmc | Report as abusive

How is that percentage misleading? Rich people, who use on a per capita basis far more of the resources and benefits delivered by our country, particularly since the $138M represents a profit margin on all effort of all of their employees (who also use many resources), and resources dedicated to protecting a much, much higher percentage of the assets in this country, pay LESS of their income than I do?

“Generous?” Please. The deal with George Bush was “get me elected, and I’ll give the richest 400 people a 25% cut in their taxes, and even better, I’ll finance it with debt, so the middle class has to repay the debt incurred to pay off the rich!”

I miss Dwight Eisenhower. 91% marginal rates sound pretty good to me. But in the short term. I would settle for Ronald Reagan. Let’s see, at 28%, that 2 of the budget% would be 4%, and suddenly our deficit would be entirely manageable.

Call me a fiscal conservative.

Posted by Dollared | Report as abusive

Note that the statistic is based only on recognized income, and not on economic income (which economists refer to as Haig-Simons income). The effective tax rate on the economic income of the top 400 earners is a tiny fraction of the 16.6% rate. (For example, Larry Page had an effective tax rate of zero on his retained Google stock, which doubled in economic value in 2009, but was not sold.)

Posted by comment1 | Report as abusive

Unz’s use of crime stats in an “average” 76% white city as a proxy for white criminality is flawed. A 24% non-white (ex Asian) demographic would be enough to drive the stats up considerably past what one would find in a truly “lily-white” area. This has been my observation as someone who has spent his life in large East Coast cities. There are also other factors, such as concealed carry laws, which will impact street crime rates.

As for emerging unscathed from his sojourn in Jackson Heights, NYC, a neighborhood with which I have some familiarity, the heavy representation of South Asians, insular groups with low crime rates, would tend to anchor the area and dissuade more crime-prone groups from “acting out.”

Posted by Mega | Report as abusive

Mega: Do you disagree with Unz’s conclusion, or are you just nit-picking his data? The article explains quite clearly why it’s tough to find decent data on Hispanic crime levels (often reported as “white”, difficult to measure illegal immigrant population). Given the constraints I thought he did a nice job coming up with some hypotheses.

I’m also not really sure how having a lot of Thai families running restaurants dissuades Hispanic youth from selling drugs or engaging in violent crime. You’ll have to explain that to me some time.

Posted by najdorf | Report as abusive