Applying the maths to effective tax rate claims.

So, Warren Buffet says his entire this year is at “between 33 and 41 percent in payroll and income taxes paid to the federal government”.

The top tax bracket is 35%. The social security component of payroll taxes is 4.2% of gross compensation, subject to a limit of $106,800. The medicate component is 1.45%, with no limit.

This means that for most filers the top marginal rate they would ever be… subject to is 36.45%, and only on income over $379,151. Married people filing separately would be slightly higher, hitting a top marginal rate of 38.65% once their earning hit $106,151, but then when they hit $106,800 it drops back down to 34.45% until it hits $189,576 and jumps up to the 36.45% rate.

Note that these are marginal rates. That doesn’t even include the standard deduction or personal exemption, much less anything else.

For his secretary to pay an effective rate anywhere near he claims, she would have to be very highly compensated. Or her husband is, which makes it disingenuous to imply the high tax rate is her own. Consider that a woman filing under the least favourable conditions – married, filing singling – making $386,000 a year (the threshold for being part of the maligned “one percent”) taking nothing but the $5800 standard deduction and $3700 personal exemption would end up paying $109,089 in personal income tax, $4485.60 in social security tax and $5597.00 in Medicare tax, yielding a final effective tax rate of 30.87%.

In fact, you can calculate the minimum income necessary to hit a 35.8% rate pretty easily with a little algebra.

((((X – 5800 – 3700)* 0.35) – 22686.00) + (X * 0.0145) + (108600 * 0.042)) / X = .358

Solve for X (i.e. income) and you get $3,299,969.23. And again, that would assume absolutely *no* tax preferred investments, no retirement fund, no itemized deductions, nothing. So either Buffet got her rate wrong (possibly including state taxes, or conflating marginal rate with effective rate), or his secretary – or maybe her husband – is in the top 0.1% of earners.

On Santorum and Zombies and the doctrine of double effect.

Public relevance inevitably carries a strict price; one paid in loss of privacy, in scrutiny and criticism. In the case of Rick Santorum, who enjoyed a renewed relevance in the wake of the Iowa caucus results, this has included a number of misguided attacks on the neonatal loss of his Gabriel. These attacks are not particularly original, largely being echoes of criticism on blogs after the formation of his exploratory committee and again after the formal announcement of candidacy.

Much of the commentary gets the basic facts wrong; claiming that Karen Santorum had “an abortion”, or at least that labor was voluntarily induced. Others refer to Gabriel as stillborn or a fetus, despite his (albeit brief) survival outside the womb. Some get the events correct on the face, but insist on dehumanizing the child by referring to him as “it”.

Even those that concede the facts, and allow that events as they occurred did not violate his professed beliefs or political stances, nonetheless conclude he is a hypocrite because they would have induced labor if necessary to preserve Karen’s life. This betrays the ignorance of the accusers, not merely of a candidate but of Catholic teaching in general. The Santorums went well beyond the demands of their faith.

The key concept is called the doctrine (or sometimes principle) of double effect, which allows that some actions have a positive and negative effect. There are generally four criteria that need to be satisfied for such an act to be considered moral. First, the act in and of itself must not be intrinsically evil. Second, the positive effect must be the intention. Third, the positive effect must not be consequence of the negative effect. Fourth, there must be grave reason for permitting the negative effect.

For example, let’s say you are in a group of people fleeing zombies. Even if tripping a companion would preserve the lives of yourself and your other companions, it would not be moral under this test, as the positive outcome would be achieved through an act of deliberate, intentional evil.

Alternately, let’s say your band of survivalists makes their escape down an alley with a chain link fence, but one member of the group is a particularly slow runner. Even though locking the gate would consign the fate of the lagging member, it would be moral under this test, as his death would incidental rather than intentional.  Though the ultimate consequence of sacrificing one for the survival of the many is the same, the nature and intent of the immediate action is fundamentally different.

Using this standard as guide, it is clear that induced labor would have been well justified.  No one disputes that Karen was in grave and immediate danger, and no act of intrinsic evil or directly evil intent would have been performed.  There is simply no evidence that the actions or intentions of the Santorums were anything but aligned with their faith.

Dear Occupiers:

You don’t to have it both ways. You don’t get to declare yourselves a leaderless inclusive horizontal movement, and then disavow any responsibility for the actions of the people who join you.

As long as your positions and your demands remain nebulous, you own every ridiculous and extreme thing said in your camps and at your rallies.

As long as your occupations persist in defiance of law and without due consideration for the surrounding population, you deserve every bit of derision directed toward you.

As long as your members are openly hostile to law enforcement, rather than seeking their cooperation, you are responsible for every act of violence or vandalism carried out in your name.

This is what democracy looks like?

Since people seem confused, this is what democracy looks like:

An Iraqi woman flashes victory after voting.

Not this:

An Occupy Los Angeles protestor.

This:

Ceremony ratifying the 19th Amendment in Tennessee

Not this:

Trash in Zuccotti Park.

This:

"The First Vote"

Not this:

New York protestor defectates on a police car.

One word for MA.

Wow.

Nobel intentions and world opinion.

When considering whether it might be premature to honour someone for their intentions and their popularity, one should think back to 2002. The President had domestic approval rating in excess of eighty percent. Global favorability ratings were comparable to, and in some cases far higher than current levels. We had recently spearheaded a successful and multilateral effort to displace a oppressive theocratic regime. Humanitarian aid flourished, ambitious initiatives to combat diseases were announced, and the President called on Americans to make a serious dedication to public service.

Should Bush have been awarded for his intentions and popularity too?

Controlling the narrative.

I wonder how many people citing this memo from the Right Principles PAC as evidence of Republican thuggery have read this memo from Health Care for America Now. Let’s compare:

Read the rest of this entry »

Strange times…

I never thought I would see the day where left wing sites would cite difficulty organizing people to counter conservative protesters. Let’s face it, the right has always had an activist gap. Not only do we skew older, which tends to mute passions, but as a group we tend to regard politics as an unpleasant distraction rather than a means to an end.

Perhaps more interesting than the late rise of conservative activism is the liberal reaction. This particular piece at FireDogLake goes as far as characterizing Republican participation in health care “town hall” meetings as “one step short of angry brown shirt mobs physically threatening and beating people”.

Watching the videos I see some people being rambunctious, perhaps even obnoxious, but “sheer thuggery”? At worst the videos circulating show a lack of decorum. I think our legislators can weather a few boisterous and resolved constituents.

Now it seems the White House has gone on record with the accusation that conservative groups are “manufacturing” anger, with vague allusions to nefarious forces behind the scenes.

I suppose honest answers to legitimate concerns is too much to ask for.

No need to insure people you don’t employ.

The recent accusations of “exaggerating costs and underestimating savings” levied on the Congressional Budget Office by White House Budget Director Peter Orszag are only the most recent salvo of an ongoing attack on the credibility of the the agency. A chorus of voices, including President Obama and many ranking Democrats in the legislature have consistently laid the charge in recent months that the CBO “always give you the worst case scenario on one initiative and never … any credit for anything that happens if you have early intervention, health care” in the words of House Speaker Nancy Pelosi.

Any projection will have flaws and oversights, and it is entirely possible that the preliminary analysis underestimates some savings, though it clearly does include them. The other possibility is that assumptions about revenue and participation are woefully optimistic and the deficit impact will be even greater than indicated.

In a letter ironically hailed by some late critics of the agency, the CBO laid out their expectations of the effects of the proposed legislation on private insurance enrolment, private sector premiums and the labor market, among other topics. Their projections are relatively supportive of the narrative advanced by the president and other Democratic leaders; certainly more so than those by private firms, such as the Lewin Group. However the letter, like previous communications and testimony, points out the difficulties and uncertainties inherent in the process.

One key factor are that may be underestimated is the impact on the labor market. Though the analysis does acknowledge that fees on employers not offering insurance “would tend to reduce the hiring of workers at or near the minimum wage, because their wages might not be able to decline by the full amount of the fee” they are dismissive of the potential impact, citing studies suggesting that moderate increases in minimum wage have little impact on employment. The relationship between minimum wage and employment is not wholly uncontroversial, though, and the compound effect of wage increases and health care tax stretch any credible definition of moderate. The nominal cost of employment will have increased by 51% over a 2007 baseline.

It doesn’t take much imagination to invent mechanisms by which small businesses might reduce their payroll in order to reduce or eliminate their obligation under the proposed legislation. Direct employees could be displaced by independent contractors or outsourcing contracts. Chains could be reorganized as independent franchise operations. Increased automation, such as self checkout machines, could eliminate positions entirely.

The extent may be arguable, but losses are certain, and the casualties will entry level.