Tax Expenditures

June 3, 2013
Posted by Jay Livingston
   
We got another reminder last week that despite complaints about federal government programs that give money to the poor, when it comes to taxes, the government is much more generous to the wealthy.

The news came in a report  from the Congressional Budget Office:

The Distribution of Major Tax Expenditures

in the Individual Income Tax System

Tax expenditures are ways that the government uses the tax system to give money to people. Some expenditures are tax credits, which can take the form of cash payments.  Others are tax breaks – giving people a discount on their income tax.  For example, if I am in the 35% tax bracket, but the government charges me only 15% on the $100,000 I made playing the stock market, the government is giving me $20,000 it could otherwise have had me pay in taxes. That’s an expense. The special rate I get on the money I made in the market costs the government $20,000.

This government largesse benefits some people more than others. 

(Click on a chart for a larger view.)

About half of all tax expenditures go to the top quintile.  The bottom 80% of earners divide the other half.  And within that richest quintile, the top 1% receive 15% of all tax expenditures (this distribution of tax breaks roughly parallels the distribution of income). Were you really expecting Sherwood Forest? 

Here is a breakdown of the costs of these different tax expenditures.

The Earned Income Tax Credit, which benefits mostly the poor, costs less than $40B.  The tab for the low tax on investment income (capital gains and dividends) is more than twice that, and nearly all of that goes to the top quintile.  More than two-thirds goes to the richest 1%.

Dylan Matthews at the WaPo WonkBlog (here) regraphed these numbers to show the total amounts overall plus the amounts in each category for each income group.

The justification for these expenditures is that they are a way the government can encourage people to do something that it wants them to do.  With tax breaks, the government is basically paying people by not charging them full tax fare – encouraging them to buy a house or give to charity or  get health insurance at their work.  Similarly with the tax credits that go mostly to the poor. We want people to hold a job and to care for their kids.  The child tax credit gives people more money to care for their children.  The Earned Income Tax Credit pays them for working, even at jobs that pay very little.  By the same logic, the government is paying me to invest my money in companies – or put another way, to play the stock market.  

Mulgrew Miller

May 31, 2013
Posted by Jay Livingston

Mulgrew Miller died on Wednesday.  He was 57 years old. 

He was a giant among piano players – a large man with large hands (he could comfortably span all the major tenths).  He was solidly in the bebop tradition.  In his twenties he was playing with Art Blakey, and he stayed in that main stream.  He recognized that bebop had become what Jenn Lena calls “a traditionalist genre,” something taught at universities, but he had little respect for avant-garde for its own sake.

A lot of people do what a friend of mine calls ‘interview music.’ You do something that’s obviously different, and you get the interviews and a certain amount of attention. . . . Guys who do what I am doing are viewed as passé.

And now Mulgrew himself has passed.  As I was listening to YouTube clips, I found this interview that contains a now-poignant moment.  Mulgrew relates how vibraphonist Steve Nelson reminds him that our time here is finite.

Hudson on Hudson

May 30, 2013
Posted by Jay Livingston

Maybe geographical names are like t-shirts.  The farther away the place, the more attractive the shirt.  Local references, not so much.  You don’t see many New Yorkers wearing I ♡NY t-shirts, certainly not here on the banks of the Hudson.

A week ago, I got an e-mail birth announcement from a local West Side politician, Ken Biberaj (politicians have extensive contact lists).  He and his wife (a handsome young couple if ever there was) named their son Hudson.

To my ear,  Hudson doesn’t really fit with their obviously Albanian surname. Maybe the Biberajs were in a New York state of mind. We do have a city and a river by that name.  Oh well, it’s different. Or so I thought.

A few day later, I was at a street fair on upper Broadway, and near a rather desultory clown who was making balloon figures, I heard a man call, “Hudson, don’t go too far away.”  And sure enough, there was a little blond Hudson, three or four years old.  A trend?   

It turns out that we New Yorkers are way behind the Hudson curve.  The name has been on the rise for the last 15 years. 

I just hadn’t noticed because the flood of Hudsons has been taking place far from the waters of the Hudson river.  In New York, New Jersey, and other Northeastern states, Hudson hasn’t yet broken into the top 100.  But in the South, in the Plains states, and the Mountain states, Hudson is doing quite well.  He’s not up there with Ethan, Mason, and Jacob, of course.  But in Utah, for example, Hudson was slightly more popular than Jayden and Lucas.  In Kansas, he placed well ahead of Brayden and Jayden (though not Aiden).  And in most other states, he ranks in the top 100, usually  between 25 and 75.  (The exceptions, besides the Northeast, are large states – California, Illinois, Florida.)

Five years ago, I wrote about the same pattern with Brooklyn (that blog post is here). This name for girls had been on the rise, but mostly in places far from the geographical Brooklyn. That pattern continues.
 

Until 1990, Brooklyn was not in the top 1000.  Since then she has risen dramatically, and is now in the top 30.  But not in New York and New Jersey, where she still can’t break into the top 100.  As I said in that post, if you’re trying to find girls named Brooklyn in Brooklyn, fuhgedaboudit. Go to Utah.  But Hudson may be different.

“Frances Ha” and Those Narcissistic Millennials

May 28, 2013
Posted by Jay Livingston

“Frances Ha,” the new movie by Noah Baumbach is basically “Girls” in black and white.  Twenty-seven year olds in Brooklyn. They move from one relationship to the next searching for a good one and never quite finding it.  The same goes for jobs and especially for apartments.* Fluidity rules. For the girls at least, only their friendships have something suggesting permanence, importance, and intensity.

Most of the reviews of the film were favorable, but at the New York Film Critics Circle, Armond White (here) would have none of it.

It offers an obnoxiously self-satisfied portrait of a young white New Yorker–played by Greta Gerwig–running out her parent’s stipend, roommating with other New York hipsters, sometimes skipping the pond to Paris, all the time pursuing her goal to be a professional dancer, even though she demonstrates no aptitude for it.

White tears into Baumbach’s “warped values,” values that White says also permeate Baumbach’s “detestable” movie “The Squid and the Whale.”  What really galls White are the concerns and desires of the characters in the film.

Maybe you have to be a Mumblehattan elite to love this kind of self-love.

I wouldn’t pay such attention to this obscure review except that it embodies a much more widely held view of “millennials” like the characters in this movie. They are narcissistic, they won’t work hard for the things they want but instead feel entitled to them. “They really do seem to want everything, and I can't decide if it’s an inability or an unwillingness to make trade-offs.”  “Their attitude is always ‘What are you going to give me,’” says a manager of human-resource programs.  (These quotations are from a WSJ distillation (here) of The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace by Ron Alsop.

A Facebook friend of mine says much the same thing

 My work in HR teaches me daily that the younger generations entering the workforce are dripping with this undeserved sense of entitlement (not all, of course).        

A business researcher says,

Nearly 70 percent of survey respondents think Millennnials are lazy and uninterested in their jobs. What’s more, 55 percent of Millennials agree.

This moralistic hand-wringing about the younger generation – even when the hand-wringers are not so old themselves (my FB friend is 33) – reminds me of the song “Kids” from “Bye-bye Birdie,” a musical that opened more than a half-century ago.**

Kids!
I don’t know what’s wrong with these kids today! . . .
Kids!
They are disobedient, disrespectful oafs!
Noisy, crazy, dirty, lazy, loafers!
While we’re on the subject:
Kids!
You can talk and talk till your face is blue!
Kids!
But they still just do what they want to do!

The perception of millennials as “lazy” or “uninterested in their jobs” or doing only the things they want to do may not even be generally true of most of these twenty-somethings.  So the complaint probably tells us more about the complainers than about the objects of their contempt.  The complaint comes down to this: Frances Ha, Hannah Horvath, and their real-life counterparts are willing to forgo financial rewards in order to spend more of their time doing (or at least looking for) something personally meaningful. And for some reason, in the view of theses critics, that’s just wrong.  Those who castigate them seem to be saying, “For years, I spent forty or more hours a week at a job I disliked, making myself miserable so that I could make a lot of money. You should choose to make yourself miserable too.”

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* You could even say that “Girls” and “Frances Ha” are really about the New York rental market.  In a 2007 post, I said that most American films are “about” Success in the same way that British films are “about” The Class System. Even if the characters do not discuss them explicitly, these ideas and structures (Success, Social Class) shape the actions and reactions of the characters in the way that grammar shapes their speech.The same goes for the NYC housing market.

** This post from years ago offers a more complete explanation of the moral nostalgia that this song is satirizing.