Interesting that they chose not to consider taxes an expense, even though many things around taxes are decision-based (such as whether to defer income, what types of investments to make, etc)
If they had shown taxes, by my calculations it would be the second biggest expenditure, just after housing.
~25% straight off the top (obviously changes depending on income). In CA another 10% for sales taxes. The 6-7% the employer pays that you don't even see.
On top of that the government inflates the currency every year by 3-5%
this isn't even taking into account the fact that producers of goods pay all these taxes as well, so that tax gets factored into the price we pay for the item even before sales tax. I'd say that another 5% for this is being conservative.
all told taxes suck 50% of our productivity out easily.
if you got a 50% raise tomorrow you think you couldn't afford private security, private schools for your kids and replacements for all other government services with greatly increased quality and lower prices?
"On top of that the government inflates the currency every year by 3-5%" Do you mean the inflation? Is so, this is more around 2%, and not directed by the government.
um...the federal reserve directly controls the interest rate paid by banks, which affects how much money is injected into the system. via the money multiplier new money disseminates out into the economy, causing inflation.
The federal reserve does not control the price of oil for example. Controlling inflation is one of its function. Again: controlling it, not setting the inflation rate. For example, there are/were fear of deflation when the inventory was high, and the demand low. With a interest rate set at pretty much 0%, there is not much else the reserve bank can do.
So I stand by my statement, the government does not "inflate the prices by 3-5%" a year.
interest set to 0% certainly is inflationary since that means real interest is negative. government doesn't control the prices of commodities directly, but if the money supply was kept static you'd get continual mild deflation.
Not to mention if you are a current full time student, you have to swap insurance or housing for education. Heck, I feel like most of that circle should be education.
It's an aggregate over all households. People are students for 4 of the ~60 years of their adult lives, so only 1/15 are full-time students. (Perhaps more, as this doesn't count grad school or two college-educated people getting married and becoming one household. But it also doesn't count the people who don't go to college at all, which is an even bigger proportion.)
Given that a very disproportionate amount of the average US income is from a few people making a lot of money, I'm not convinced that looking at expenditures averaged over the population is in any way indicative of the situation of someone making median income. (According to Wikipedia/US Census Bureau, 2007 median household income was $50k, quite different from their average of $63k.)
Interesting. For reference, rough figures from Finland:
- housing 28%
- transport 15%
- groceries 12%
- culture and spare time 11%
- personal well-being, extra studies, etc. 11.5%
Personally, I can confirm that living costs (i.e. rent or mortgage) indeed do chop the most off my salary but food comes already as the second, but then again I eat well :)
America's obsession with cars explains the high transportation outlay (currently > 17%). So many assume that they have to buy new cars (preferably luxury brands, which connote status) and change them every x years. They'll buy them on layaway even if they can't afford the payments.
Very surprising that people spend 34% of their income on housing. I have always thought it unwise to spend more than 25% -- a big reason why I still rent even when people were telling me I was "throwing my money away".
I'm surprised it isn't more. In places on the East and West coast you have to spend close to half your take home income or else live in a complete crime ridden run down ghetto.
I'll hazard a guess that the 25% figure refers to rent and mortgage payments only. If I'm understanding the chart correctly, that's what it calls "shelter" -- just one part of "housing", which accounts for 20.2% of expenditures.
It's a little unclear from the chart. But if you have a mortgage, you pay lots more in taxes (the "public services" bit), household insurance, and in repairs.
If you own a home you mean. If you have a mortgage, the interest is tax deductible, so you pay a lot less in taxes for at least the first half of the term.
It may be different in other parts of the country. In Florida, the property taxes alone were more than the cost of renting a similar place. So for a $300K condo you paid almost $13,000 in taxes to the city to pay for water roads, schools, etc.
Interesting thing to note: The average 'consumer unit' spends 4.8% of their income on gas/oil. So when the price of oil goes up about 20%, it requires roughly 1% more of their annual income... and yet people still claim that the price of gas is 'killing them'.
It's not the 1% that's killing them - it's the fact that they're spending at their limit and they don't have that 1% available.
"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." -- Charles Dickens, 'David Copperfield'
I think this point doesn't get enough attention from people whose salaries are big enough to save lots of money. If you make $60K after taxes and spend $30K, then you can easily eat a $300/year increase in gas expenditures. Your savings rate goes from 50% to 49.5%, big whoop. But if you make $31K and spend $30K, and gas goes up $300/year, it's eaten up a whole 30% of your savings rate. And if you make $30K and spend $30K and gas goes up, you're screwed.
An effective 1% pay cut you weren't planning for could be a big deal.
But also: we've seen swings of +95% within the past 3 years -- so at the peak, people were complaining about an effective 5% pay cut.
And not everyone complains. I have a tiny commute, a professional job, and live in an expensive city where housing costs dominate -- so even double the gas price is a curiosity ("OMG I've never seen a tank cost that must") rather than a serious pain-point.
On the other hand, many people are far above that 4.8% average spend. They have long commutes and fuel-inefficient cars. Poor people, especially, tend to spend relatively more of their income on gas.
So when the price of gas goes up 95% (as it did from Jan-2006 to Jun-2008), and you have an older car and above-average commute -- you may have just taken a 10%-plus pay cut, when you may have been living hand-to-mouth already. Such people are honest about higher gas prices "killing them".
Fair enough. And it's true that poorer, or more rural, drivers spend a much higher percentage of income on gas. See excellent graphic by the NYT on this:
I think I was reflexively lashing out against some people I know that constantly complain about gas, yet choose to drive large trucks and definitely aren't struggling to make ends meet. For them I suppose it's just another topic for small talk, much like the weather.
Maybe those people should buy oil futures, or stock in energy companies then. That way, when oil prices rise, they can cash in on their investment and cancel out the higher gas prices. If they have some financial leeway, they don't have to be a slave to gas prices.
I met very few people who complain that the price of gas is 'killing them'. What you hear is the voice of a minority who either spend much more on gas or just like to complain about it.
Edit: why the downvote? Doesn't it make sense that those who are vocal about how gas prices are killing them are those who spend _way more_ than the 'average consumer unit'?
If gas represents 20% of your income instead of 5%, you are much more likely to complain when prices go up. This will be the case for people who make less than average, have long commutes and older cars.
Maybe it's because people make such a big deal about it. You see the price of gas a couple of times each time you got to work and news anchors will do a story about the price of gas each time it goes up a couple cents. In contrast, we never see the price of bread or jam as often as we see the price of gas. I guess it's an observational bias.
I don't have a 'family', but I only spend maybe $250/yr on alcohol, and my girlfriend doesn't spend any, and we are in our mid-20s.
It's not for any moral reasons. I only drink beer that I think is tasty, and then pretty much only with meals at restaurants. She just really doesn't like the taste of alcohol.
Can someone from mint.com confirm these figures? Surveys are fine but I trust transactional records more. The figures don't seem far off as I compare to my mint.com breakdown, but I'd like a more comprehensive and modern approach to this data collection.
Yes it does. `Income before taxes: $63,091', `AVERAGE ANNUAL EXPENDITURES: $49,638'.
Computes to $13.453 paid in taxes. That's about 21% of gross income, and compares to expenditures as about 27%. It is my understanding taxes aren't considered expenditures or `costs' anyway.
The ring breaks down the expenditures, not the gross income. Whether this is fair or not is up to a democratic debate ;)
No, it doesn't. You proved it yourself. You had to do some math to figure it out.
The reason taxes don't appear on this U.S. government publication is the same reason that they take withholding out of your check. If you actually saw what it cost you each year, it would piss you off so much you might actually get off your butt and do something about it.
The less cynical explanation is that people are generally horrible at saving money, so withholding is the only way the taxes would get paid by most people. It reduces risk to the government that people won't have the cash on hand at the end of the year and just declare bankruptcy or otherwise claim they can't pay. Businesses don't have withholding, but they have quarterly tax payments for the same reason I'd bet.
This is the reason that withholding is used by individuals to fund their retirement plans and other rainy day savings accounts. It's too easy to fritter the money away if you actually get your hands on it.
I would agree with you that it'd be helpful to see taxes as a section of the pie chart here, but presumably the focus here is what people choose to spend their money on, and taxes aren't much of a choice.
Well yeah, but I mean you can't really choose you level of tax payments as an individual. I can choose to leave and not pay any, but I can't say "better cut back on my taxes this month to make ends meet".
I'm not complaining about my taxes. I think there are tons of things we could do to improve how we spent tax revenue, but I wouldn't say we are overtaxed.
You choose to stay. A person may be born in an apartment, but that doesn't mean they can live there rent free for the rest of their life. And yes, you are not just free to walk into some other country and live there. But nor are you are allowed to walk onto someone else's property and live on it.
I'm not sure if your reasoning for this is the same as our mutual friend MM's, but I've been meaning to address it, so I might as well do that here. To take your position, I think you first have to admit that USG is the de facto owner of all US territory. You, MM, and I would probably have no problem admitting this, but most people would have trouble with it.
But even after we admit this, we still need to ask if this ownership ought to be treated as legitimate, and there I disagree with MM.
Why should adverse possession apply? One use for it is to establish who the de facto owner is, but that is of course unnecessary here. Another is to provide more security for property owners -- does the most powerful corporation in the history of the world need that from us? Third, since adverse possession is based on the doctrine of laches, if it applies here doesn't England have a stronger claim to ownership?
Also, if we are applying common law principles, I contend that USG has in the past engaged in massive fraud by pretending it is not the actual owner, and continues to do so today. When we also consider the violent means it has used to acquire and maintain ownership, we have force and fraud -- enough to disqualify USG as a legitimate title holder.
> If USG is not the legitimate title holder of middle-North America, who is?
I admit, the answer is unclear, but it does seem clear that USG is not it.
Correct me if I'm wrong, but it seems your reasoning is at least slightly different from MM's, then -- I don't think MM has much of an interest in this question or much of an answer to it, since he has criticized the "Rebellion" but now accepts USG's ownership.
Adverse Possession does not care how the property was acquired. All it cares is that the owner has managed to maintain uncontested possession of it. The states originally siezed the territory from the Brits. The Feds then seized it from the states. Neither usurpation is still contested to this day. No state government maintains that the New Deal is illegitimate.
Adverse Possession is not about making moral claims. It is a way to prevent violence by settling who owns what. Groups would try and manufacture claims and rally groups to regain possession. You see this happen in the Balkans and Middle East with claims going back hundreds or thousands of years.
Of course, in some ways the question of legitimacy of state ownership is silly. Law between sovereigns or between a sovereign and its residents is always jungle law. The strongest wins. By definition, there is no third party to enforce the law.
I don't think I disputed anything in your first two paragraphs, but let me know if you think I did. As you say, the strongest wins, so why rely on something like adverse possession? If you're saying it ought to apply here solely for the purpose of preventing violence, then, as I said, it doesn't seem necessary. USG's military and propaganda arms are powerful enough today as to make this irrelevant.
Of course, if most of the residents are very dissatisfied with their sovereign and are willing to take extreme measures, they have a chance of winning regardless of immediately available firepower. This is where the question of legitimacy matters, because a sovereign will have at least some trouble if its residents do not accept its legitimacy, even if it wins in the end.
This is where the question of legitimacy matters, because a sovereign will have at least some trouble if its residents do not accept its legitimacy, even if it wins in the end.
There are two things to consider in regards to USG's relationship with middle-North America:
a) property ownership
b) management structure
I do not view the property ownership as illegitimate. I do not agree with the libertarians who view taxation as theft. I think such a view is neither justified nor constructive.
USG's management structure is awful. It badly needs reform or a reboot. The goal of a management reboot is not so that us subjects will pay more taxes. It's so that resources will not be squandered. This would end up being good for us subjects, but it would also be in the interest of USG itself. Thus I view a management change as more likely to succeed and less likely to incite violence.
If a management structure is bad enough, an outside group could be morally justified ( though not legally justified) in trying to seize the territory itself. But that would be worst case.
> I do not view the property ownership as illegitimate. I do not agree with the libertarians who view taxation as theft. I think such a view is neither justified nor constructive.
Yes, there are some libertarians who naively, and incorrectly, believe they are the de facto owners of property in the US. That is, they would not even agree that USG actually owns all US property. However, I'm afraid I still don't see why you view USG's ownership as legitimate, unless you are equating de facto ownership with legitimate ownership -- i.e., you don't believe there is any difference between the two.
> USG's management structure is awful...
Agreed, of course.
> ...but it would also be in the interest of USG itself. Thus I view a management change as more likely to succeed and less likely to incite violence.
I'm not so sure about this. Yes, USG could be run more profitably, but severe agency problems exist. Would the leaders of the Catholic Church want their subjects to be told there is no God, even if these leaders were paid large sums of money? Power and influence are worth something to them as well.
> If a management structure is bad enough, an outside group could be morally justified ( though not legally justified) in trying to seize the territory itself. But that would be worst case.
I assume a group of subjects would also count as an "outside group"? If we are using common legal principles, then for the reasons I mentioned earlier, I suggest they would be legally justified as well, even if this might not matter all that much in the real world.
However, I'm afraid I still don't see why you view USG's ownership as legitimate, unless you are equating de facto ownership with legitimate ownership -- i.e., you don't believe there is any difference between the two.
I think the concept of adverse possession is a necessary concept to avoid violence and enable us all to get along with each other. So if de facto ownership exists for long enough, it should be considered legitimate.
Would the leaders of the Catholic Church want their subjects to be told there is no God, even if these leaders were paid large sums of money? Power and influence are worth something to them as well.
Any Moldbuggian plot to reboot the U.S. would require a critical mass of mandarins to acknowledge the intellectual bankruptcy of the current regime. Well, either mandarins or soldiers.
The other option, which is perhaps more plausible, is that perhaps break away republics can form as the U.S. continues to weaken. Those break away republics could innovate new forms of government and provide examples of how to reform USG.
> I think the concept of adverse possession is a necessary concept to avoid violence and enable us all to get along with each other.
If possession is established and maintained violently, I'm not sure legitimizing this is a good way to avoid violence. MM does tend to confuse order with peace.
Example: Jack kidnaps John and forces him to work as his slave. John soon attempts to escape but is prevented from doing so. Under Jack's brutal rule, John eventually gives up trying to escape. Years later, Jack's crime is discovered, but Jack is allowed to maintain ownership of John due to adverse possession. Order is preserved, but the violence continues.
> Any Moldbuggian plot to reboot the U.S. would require a critical mass of mandarins to acknowledge the intellectual bankruptcy of the current regime. Well, either mandarins or soldiers.
If that's true, then yes, a reboot seems about as likely as the Pope declaring his atheism. Well, maybe less likely, because the Pope is just one person.
> perhaps break away republics can form as the U.S. continues to weaken
Perhaps, but a total collapse of USG or even the formation of the fabled NAU conservatives keep droning on about would surprise me less.
If that's true, then yes, a reboot seems about as likely as the Pope declaring his atheism. Well, maybe less likely, because the Pope is just one person.
Well, the reformation did happen. And the Soviet Union did fall. And Deng Xiaoping did say, "It matters not the color of the cat, but whether it catches the mouse". The problem is, that the leaders of these states all had positive examples to follow. The U.S. has no positive example of what a good management structure looks like.
Perhaps, but even a total collapse of USG or the formation of the fabled NAU conservatives keep droning on about would surprise me less.
I'm not familiar with the concept of NAU conserveratives. Mind explaining?
So do you have any ideas about what should happen? Or what will happen?
> Well, the reformation did happen. And the Soviet Union did fall. And Deng Xiaoping did say, "It matters not the color of the cat, but whether it catches the mouse".
Agreed; I wouldn't say it's impossible.
> The problem is, that the leaders of these states all had positive examples to follow. The U.S. has no positive example of what a good management structure looks like.
Maybe you're right. The changes required for USG seem more drastic to me than those that were applied in the Soviet Union or China, though. After all, Protestants are still Christians.
> I'm not familiar with the concept of NAU conserveratives. Mind explaining?
This scares some conservatives to death, particularly the ones who worship the Constitution. I think the biggest change we'd see is different text on some signs, and I'm exaggerating only slightly.
> So do you have any ideas about what should happen? Or what will happen?
My ideal looks somewhat similar to "Patchwork", but without the joint stock corporate management structure, which I believe has some fatal flaws. As for what will happen, I can't say I'm sure, but I'd guess some sort of catastrophic financial collapse and associated instability. As we know, the worldwide financial system is horribly engineered. We can try to be optimistic about what comes after that, but realistically things could get pretty ugly. The parts of the world that are mostly disconnected from the financial system will be relatively okay; spontaneous order could arise in small pockets of the developed world as well, but much of the West could plunge into violence and chaos for some time.
I think the point of the diagram is to show where people decide to spend their money, that is, the money they actually get. What they get is after-tax. They do not get to spend the portion that is taxed away anyway so it's not on the list because it's not their choice.
By the way, don't you guys in the U.S. get a salary report for each paycheck you receive? Such a report in Finland would state your salary before taxes, after other deductions such as insurance, pension, union fees etc. each listed per row, and finally your salary after taxes. I think that producing such a report is required for all companies so at least in this part of the globe you wouldn't miss how much you pay taxes.
I must say that personally I really don't even know my salary before taxes unless rounded to the nearest 500 euros or so. All I'm interested in how much I get transferred to my bank account each month.
> By the way, don't you guys in the U.S. get a salary report for each paycheck you receive?
Yes we do. Most people ignore it (just like you). They figure take-home is their income and that any refund that they get after filing is "free money" to them and not a zero-interest rate loan to govt.
I couldn't agree more. Amazing how furious the population would get if they had to write those bigass checks every quarter.
It's too bad. I'd love to see an organized effort by business owners to say "screw withholding" for employees (despite it's illegality) and watch the government scramble. You can't imprison everyone.
Instead states taxes tend to be particular levies for works or "stamp duty" on purchases (e.g. cars/houses).
However, when I put the figures through using current exchange rates, AU income tax would be $14,352 US on that amount (around 29% compared to the original 21%) and our tax rates and thresholds have dropped quite significantly recently.
It's not clear that taxes has to make the balance. There is no entry for savings, for example, nor for debt service. I guess they classified "expenditures" as not including savings, as that's not really expending anything.
Some taxes are paid on income, other taxes (such as sales) are paid on expenditure. Other taxes (such as property, including cars) are billed directly or lumped into something else (rent).
