The "Gig" Economy, Helping or Hindering the Gap?

I feel that a large issue in the current economy is the large gap between the wealthiest and everyone else.  The way this affects taxes is deeply relevant. Wages and income are currently being defined in multiple way.  An example of this is Uber, which the article discusses as having many employees, yet few employees who are receiving what is a real income with benefits.  The risk to government revenue is the large amount of difficulty and cost the contract employee is required to pay is high.

When there is already a gap between the highest and lowest paid workers, adding on a number of workers who are expected to bear the entire burden of taxes the efficiency and equity of the tax decreases dramatically.

To read more about what the "Gig" economy is and how many people are involved in it read more in the New York Times here.

Lady jockey and australian government leave the rest in the dust

The Economist has a quick little article (link here) about the choices made by the Reserve Bank of Australian to not change interest rates, while GDP is below average.  As a result there is call for a change. "Malcolm Turnbull, prime minister of a conservative government, to raise the consumption tax from 10% to 15%. "

Big Pharma looking to Go Green, and not in the way you think.

Pfizer, the very large pharmaceutics supplier in the US is looking to move some of its operations to the land of green, Ireland.  Tax rates for companies are lower across the ocean and since it was discovered as a loop hole in tax code in the 80's many companies have reorganized abroad.  By lower, I mean drastically lower.  In Ireland the company would be paying about 12.5% taxes as a company rather than 35% here.  With a company as large as Pfizer it's a serious way to cut spending.

To hear more about this move, listen or read the story from NPR here.

Socialist Bernie, at it again

Here is an alternative to the current tax policy.  This is not an alternative I see being politically feasible, not only because it's proposed by very liberal Bernie Sanders, but also because countries in Europe have adopted it.  Socialist.

You can read more about it here!

Education in Arizona vs. Federal Spending on Education: Where does this leave the children

Spending on education in Arizona is notoriously dismal, which is why it’s interesting that you can find competing data that Tucson is spending its money very efficiently and reports that Tucson is cutting spending on education and spends the least on students. 

Data Set 1 (source: https://wallethub.com/edu/cities-with-the-most-least-efficient-spending-on-education/9390/)

Here the amount that localities and states spend on education is taken from the US Census Bureau and then broken down by the standardized test scores in reading and math with grades 4-8 and then divided by the total spending per capita.  By this standard, Tucson, who spends very little on its students ranked high.  This brings into question whether or not we need to spend money on students for them to succeed? As someone who went to school in Tucson I’m not sure that lowering spending on students is what causes good test scores, I think teachers who teach to the test is what causes decent test scores.  Further, this statistic of spending would have me think that Tucson is spending money efficiently and has nothing to do how the tax is being collected.

Data Set 2 (source: http://www.insidetucsonbusiness.com/news/arizona-ranks-no-in-education-spending/article_e7961de8-49ac-5a79-a51b-8fa0205de2ea.html)

The Census Bureau report ranks Arizona as a state 49^th in spending on public education but the same report says the state ranks 19^th on wage and salaries in public education.   This results in Arizona spending $7,608 per pupil, 64.1% of that is spent on wages.

C hart 

Chart 1 - State and Local Spending in Arizona

                

Chart 2 - Federal Outlays 

Source for both charts: http://www.usgovernmentspending.com/

When keeping the amount spent per student and the percentage spent on wages in mind, we can then step further to look out at the difference between federal and state spending.  The tax collected reveals our preferences as a nation.

The vast difference in spending on education between the federal government and the state or local government (seen on graphs 1 and 2) causes the disparities discussed above, the local spending on education in Tucson is allowed to be so drastically different from other states because of the lack of federal funds.  States defining how money is spent on children leads to what I suspect is a teacher who is paid by their ability to teach specifically to a test so that a state doesn’t have to suffer the shame of letting down their students.  I personally doubt that the national standpoint on education is that children from Arizona don’t deserve to have access to the same public schools as children in New York.  I suggest that there should be a revisit towards the percentages spent on children at the federal level so that states can focus on equality on a local level with out stressing over where their funds are coming from.

Feel smarter than your average Joe. Taxes broken down with pictures!

This article aptly titled, How America Pays Taxes in 10 not-entirely Depressing Charts appeared in The Atlantic in 2014, but considering that what you pay taxes on probably hasn't changed very drastically over the last 20 years I'll go ahead and say this article still applies to you (average Joe, that's you).

I've provided one chart below to tantalize you, while the others can be perused at your leisure.  Now if you need more of a reason to read this article I'll summarize it like this, knowing that your taxes are coming up is a bummer but often when we are paying tax we aren't sure where to source our complaining.  If you're into complaining *hand shoots up in the air* this article will help you pin point where your money is going, what it is spent on, and how it's fluctuated over time.

Get your pens out, some congressmen have some strongly worded letters coming their way.

If you want to find more things about taxes feel free to look at more graphs like this one from the Center on Budget and Policy Priorities. 

Did The Donald bring up something of merit?

I consider Donald Trump to be good for just about nothing, in fact, I've been attempting to ignore his whole "candidacy," but alas he's brought a tax reform that's interesting back to the table, and from the Right no less.  The tax reform in question is the carried-interest tax.  It was previously discussed eons ago when Obama mentioned, but failed to act on it back in 2011.

So what exactly did Trump suggest?  Check out the full article here, or only read my summary and feel super on top of political conversations when your silly friends are commenting on Trump's hair malfunctions or similar nonsense.

How taxes make people feel; "Many voters are frustrated by years of stagnant wages and growing income inequality, which has been exacerbated by the tax code’s preferences." These preferences are seen explicitly in the carried-interest tax.

Even an old NY sweetheart joined the conversation, George Pataki, former governor of New York, joined Mr. Trump’s side. “I would not give a special tax break to the Wall Street fat cats,” Mr. Pataki said, adding, “It’s hard for me to say I’m with Donald Trump on anything, but on this issue, I agree with him.”

Did you think I would summarize all the high points and not actually discuss what in the world the carried-interest tax break is?

WRONG my dear friends.

Basically, as I understand it, the carried interest tax break means that people who make an abnormal amount of money - think hedge fund dudes (yes dudes, there are few women in this realm) and some private equity firms.  So these people are moving their money in two separate ways, one of those ways gets taxed like it's income, because it is, the other way is they spread it out over time and get it taxed like capital gains, or at a rate of around 15% which is less than income is taxed.

Besides the New York Times, I found further information on the capital gains tax here.