Older and Wiser - Take Two

The Pew Research Center released another study that indicates a gap between the older and the younger...this time in favor of the older.

Households headed by older adults have made dramatic gains relative to those headed by younger adults in their economic well-being over the past quarter of a century, according to a new Pew Research Center analysis of a wide array of government data.

In 2009, households headed by adults ages 65 and older possessed 42% more median net worth (assets minus debt) than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by younger adults moved in the opposite direction. In 2009, households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts had in 1984.

As a result of these divergent trends, in 2009 the typical household headed by someone in the older age group had 47 times as much net wealth as the typical household headed by someone in the younger age group–$170,494 versus $3,662 (all figures expressed in 2010 dollars). Back in 1984, this had been a less lopsided ten-to-one ratio. In absolute terms, the oldest households in 1984 had median net wealth $108,936 higher than that of the youngest households. In 2009, the gap had widened to $166,832.

The entire report can be accessed here.

Older and Wiser

According to a recent report by the Pew Trust indicates that being older and wiser isn't always better...at least not when it comes to long term unemployment.

The Pew report found that although long-term unemployment does occur among all ages, those 55 and older are more likely to be out of work longer than younger works. 43% of those 55 and older who are unemployed remain so for more than a year.

While higher educated workers are less likely to lose their jobs to begin with, once unemployed there is no difference in the average length of unemployment among different education levels.

To read more about the Pew Trust analysis of unemployment, click here.

The Necessity of the Economic Census

When most people think of the U.S. Census Bureau, they think of the decennial census of population. It would be hard to find an average person that would think of the economic census when considering the U.S. Census Bureau, yet it provide essential details on every aspect of the economy of the United States.

The economic census, conducted in every year ending in 2 and 7, provides details on manufacturing, sales, industry, housing, updated population data, and other important inputs to the creation of the Gross Domestic Product (GDP) figures. The corresponding census of governments also provides data for GDP. Both of these census' are slated for significant cuts or cancellations in the House of Representatives 2012 appropriations bill.

Examples of data that would not be collected include statistics on establishment and employment of business across all industries, fees paid for real estate purchases, mining tonnage by geographic area, and cost of transportation by mode. All of these are statistics that businesses rely on to make informed market decisions. There is no other organization equipped to provide this amount of statistics detail spanning all sectors of the economy.

We are at a period in time when up to date information about the economy is key to government intervention and market practices. Neither the private sector nor the government will have the necessary data to respond to current economic problems if the census is cut.

Many groups are amazed that this is even in question at this time including the National Associate of Business Economists'. The head of the NABE's statistics committee, Maurine Haver, commented to the Huffington Post "It leaves me rather speechless, actually. I just don't understand it." Former Census Bureau leaders issued a joint letter to Congress explaining that "...going without a 2012 Economic Census in the midst of the worst recession in half a century is akin to turning off the country's economic GPS at the very moment it is critically needed."

Congress was careful not to change the budget much for the Economic and Statistics Administration which is responsible for the GDP data. However, they fail to recognized that most of the input data still comes from Census. Haver was quick to point out that "the basic data that go into the national accounts are born at the Census Bureau."

The Census Bureau has come under fire in recent years for the type of data it collects during the decennial census and in the American Community Survey, particularly from the far right. Cutting the economic census is not an appropriate response. A census that gathers valuable information for businesses and lawmakers in an unstable economy should be considered a priority by anyone who wants facts to drive their decision making process.

Given the time needed to benchmark data after a lapse in collection, the next useful economic data would be released in 2022....15 years after the 2007 Economic Census. We simple can not afford to miss that much of what is going on in the United States economy.

Policies regarding housing "bail outs" are always controversial among economists (well, any policy is controversial among economists!). Coming at the policies from the national level often only gives the big picture such as how the policy will affect the national budget/debt levels or aggregated income levels. Sometimes we forget to look at the view in our own neighborhood. How exactly does this policy affect us or our neighbors?

This week in the Orlando Sentinel a neighborhood level view of the most recent housing interest rate change plan  was discussed. The article presents how this project would help specific families, particularly families who are trying to stay current on their mortgage payments. Check out the article here.

Helping families that are locked in at a higher interest rate, yet are trying to stay current on their obligations may not make a huge big picture impact, but it might be just what our neighborhoods need.

What do you think? Leave us a comment below.

Dave Ramsey's Letter to Occupy Wall Street crowd

Here at Bennett Research Services we are huge fans of Dave Ramsey. We highly recommend his books and courses! This week he took on the Occupy Wall Street group, questioned some of their demands, and made useful suggestions to those people that actually want to change something. The article is a must read. You can find it here: Dear Occupy Wall Street.

I have copied my favorite section below:

“Wealth Redistribution Is the Answer!”
I’ve heard a lot about wealth redistribution over the past few years, and I’m sure you’ve heard it too. Call it whatever you want, but this is how it usually sounds to most Americans: “We are the 99% of Americans who don’t have as much as the 1%, so we’re mad and think the government should take their wealth and property away so that I can have a piece of it. Wealth inequality is a moral breakdown! We should all spread the money around so everyone gets a fair share!”

I have my toughest critique for those who believe this: You are a thief. When someone takes my money and gives me no say in the matter, that’s called theft—whether they’re using a gun or the government. At the core of this demand is envy. And that’s not the same as jealousy. Jealousy just says, “I want what you have.” Envy is a different beast. Envy says, “I don’t think I can ever have what you have, so you shouldn’t have it either.” Decades of horrible economic teaching and the politics of envy have kept this monster alive and growing and moving forward.

This way of thinking makes you assume that all rich people are evil and have scammed their way into wealth. That may be true in the tale of Robin Hood, but I choose to live in the real world. Sure, there are some scoundrels, but the vast majority of successful men and women got that way by working hard and serving people—lots of people. Steve Jobs and Bill Gates changed the world in ways we’re just now starting to realize. Their positive impact on the world has helped all of us live better lives, and they made fortunes for themselves by doing so. Why is it that you’re holy if you help one person but evil if you help a million? That’s just stupid.

A good friend of mine is a country music legend. He’s made a bazillion dollars over his career, and he just bought a $400,000 car. He’s worked like a crazy person his whole life, spending decades in tour buses, writing songs in the middle of the night, and entertaining enormous crowds of cheering fans. He paid a price to get there, and I’m happy for his success. Would it be right for me to walk into his house and demand my “fair share” of his wealth? Heck no! I’m a terrible singer! I didn’t do one thing to contribute to his success, so why would I be entitled to a share of his wealth? He’s given me years of entertainment through his music. That’s my fair share of his hard work.

My problems aren’t his fault. And my problems aren’t McDonald’s fault or Home Depot’s fault or Walmart’s fault, either. My problems are my fault! And the more people these companies serve, the more money they make—and that’s none of my business! If you don’t like McDonald’s, then here’s an idea: Don’t eat there. But don’t walk into the restaurant and demand a portion of their proceeds for the day.

When you scream, “I’m in the 99%!” you just look like a whiner. Those of us willing to pay the price to win look at you and shrug. Heck, when it comes to the music business, I’m in the 99% myself! But that doesn’t mean I have to tear Toby Keith, Brad Paisley or even Kanye down. Oh, and a special note just for Kanye: Capitalism has been pretty good to you. I celebrate your success, but you look a little hypocritical protesting capitalism while wearing a $50,000 watch.

Statistical Abstract

The Census Bureau released the 2012 Statistical Abstract this month. It is considered to be the "authoritative and comprehensive summary of statistics on the social, political, and economic organization of the United States". The New York Times recently found some interesting data in the Abstract, although the article points out there is no context for the data.

Twice as many Americans play computer games as do crossword puzzles. More go bird watching than attend classical music concerts. Iowa has six times as many hogs as people. A record 26.6 million households do not use land lines but rely only on cellphones.

And if you were wondering about the health of Americans you can find that too...

Whether Americans are healthier is hard to tell. Farmers produced fewer potatoes and less spinach but more watermelons. People drank more tea and less coffee and ate more yogurt and less high-fructose corn syrup. Half the population said they had not dined out during the previous year. Smokers among 18- to 24-year-old men rose to 28 percent from 23.6 percent between 2008 and 2009 alone. The abortion rate per 1,000 women declined since 2000, while the rates of suicide and bankruptcies rose.

While there are lots of data in the 1400 page print edition and it is used by academics and journalist all over the country, the Abstract is on the budget chopping block for the next fiscal year. As more and more federal data series are published on the Internet, the government sees less need for a consolidated source.

Friday Fun: Mocking Visualization

Just for fun because it is Friday...here is an amusing picture of types of infographics most often used around the web...that explain almost nothing. Enjoy!

(source, via)

Federal Government Spending in Florida

The U.S. Census Bureau released the Consolidated Federal Funds Report (CFFR) for Fiscal Year 2010 this week. This report presents data on federal government expenditures in each state and the U.S. Outlying Areas regarding spending for retirement and disability payments, other direct payments (including food and income benefits), grants, procurement, and salaries and wages. The following is a quick look at federal expenditures in Florida.

Federal expenditures in Florida totaled $186 billion in 2010, out of a U.S. total of $3,276 billion. The following chart shows the categorical distribution of those expenditures.

(click picture for larger image)

Overall, Florida received 5.7% of federal expenditures by state area (Florida has 6% of the U.S. resident population). The highest percentage by category was 7.7% for other direct payments, which is expected due to the large low income population in the state. This was closely followed by 7% for retirement and disability. The lowest percentage by category was for grants received, which was only 4.1%. This is surprising given the number of research universities in Florida.

Although NASA is Florida’s most well-known federal program, Florida does not receive a large amount of NASA’s expenditures by state area. Of the total spending by NASA on grants, procurement, and salaries and wages, Florida receives about $1.1 billion or 5%. Most of NASA’s spending is in California and Texas according to the CFFR.

The CFFR also presents data on federal assistance programs for loans and insurance. Florida receives about 36% of the national total for insurance programs, by far the largest recipient of federal insurance aid. This is primarily due to the $477 billion received for flood insurance.


The CFFR can be accessed at www.census.gov/govs/cffr. For further research regarding federal spending, contact Bennett Research Services at www.bennettrearchservices.com

Interesting View on the Tax Compromise

Greg Mankiw discusses the implications of reducing the payroll tax on the employee side versus the employer side.

Read it here.

November 7th - The Week Ahead

Fox News' The Week Ahead

Biggest news this week is President Obama travelling to Asia and the G20 Summit

President Barack Obama will spend the next week in Asia, visiting India and Indonesia before heading to the summit of the Group of 20 largest economic powers in Seoul. The G-20 meeting, which starts Thursday, will address trade surpluses and deficits as part of efforts to restore so-called balanced global growth. The world leaders also will consider stronger global banking regulations

Also, earnings from major retailers will be released this week including Disney and Cisco. Earnings are expected to increase.

The Federal government will be release trade statistics later in the week.

The U.S. trade deficit for September, to be released Wednesday, likely changed little from a month earlier, according to a poll of economists by Briefing.com. The deficit widened to $46.3 billion in August as import demand remained strong despite a weaker dollar. The government also will report on September wholesale inventories Tuesday. Next Friday, the Reuters/University of Michigan consumer sentiment index will issue its preliminary reading for November.

Talking to Kids About Money

The economic downturn has been hard on everyone, even the kids, with less discretionary money to go around. Here are some tips on talk to your kids about the family funds:

(From CBS's MoneyWatch)

The Wrong Thing: “I don’t know how we’re going to pay the bills this month.”

Freaking out about the pile of bills? Resist the urge to tell your children about it, because they can’t help. “Don’t give them TMFI: too much financial information,” [Dr. Brad] Klontz says. “We can’t involve them in things they’re powerless to do anything about. Laying that load on a child makes her anxious.”

The Right Thing: Present a confident front, and then involve them with problems they can help solve.

Do have a conversation, because kids are sponges, and if you’re stressed, they’re going to feel it anyway. Tell them what’s going on, and then ask them to help with things they can manage. “Times are kind of tight. Dad lost his job. He’s looking for a new job, but don’t worry about it, Mom and Dad have it handled. This is what we’re going to do. We’re going to be eating out less. Do you have any ideas on stuff we can cook at home?”


The Wrong Thing: “It’s none of your business how much money I make.”

If a kid asks how much money you make, should you tell them? It’s understandable if you don’t trust them to keep that information private. But realize that if you don’t talk about it, you’re sending a signal. “You could be giving them the message that having a lot of money or having a little money is shameful,” Klontz says. “So maybe the kid walks away with the belief that having money must be bad, or that rich people are somehow evil or shallow.” What will that do to his earnings potential?

The Right Thing: Be honest - if you can stomach it.
Klontz meets with 30 adolescents each week, and if they ask about his income, he tells them. (Note to readers: I didn’t have the nerve.) “People will tell you more about their sex lives than how much money they make. I don’t feel any reason to feel ashamed about it,” he says. “If they ask you, I think it’s OK to tell them. You can ask them not to tell their friends, but give them a reason why: You’re afraid other families or friends are going to judge you for having more or less than them.” Try to avoid conveying shame to your kids.

The Wrong Thing: “I work so you can go to camp, art lessons, or play sports.”

If kids are fussing about your long work hours, it’s natural to want to tell them you’re putting in extra hours to fund their activities and their toys.

The Right Thing: Look at what’s really going on.

When your kid makes you feel like you’re not spending enough time with him, that gets you defensive. The right answer is, “Work is important to Mom, but what do you think about us trying to set aside some time when we can be together, you and I?” In this case, it’s not about the money, so resist trying to place an unfair burden on the kids.

The Wrong Thing: “$60 for a Halloween costume? That is way too expensive. I’m sorry, but I just can’t afford it.”

You feel bad or guilty, so you’re apologizing, which only magnifies the issue.

The Right Thing: We have $15 to spend on a costume.

Say it matter-of-factly: “This is our budget, $15. We can go to a thrift store or the Salvation Army, or we can buy something in this range.” If you state it firmly, without letting your emotions in, they probably won’t challenge you on it.

The Wrong Thing: Silence about money.

“Kids make the association very early on between money and the ability to buy things,” Klontz says. “I don’t think you can talk about it too early. The biggest mistake parents make is not talking about it. Because kids will arrive at their own conclusions about how money works, based on what they see us do and what they hear. They always arrive at erroneous conclusions - that’s the child’s mind, right?”

If those understandings aren’t challenged, as they turn into adults, they operate from these beliefs. For example, if a child grows up in a family that’s struggling financially, he might walk away with the belief that there will never be enough money. “There are two typical responses,” Klontz says. “Either he’ll be a workaholic who hoards money and never spends it. Or he’ll be a frivolous spender, because he’s never going to have enough anyway, so why try? The more emotional the experience is growing up, the more tightly we hold onto those beliefs.”

The Right Thing: Share Your Values About Money.

When your son is begging for a new computer game, say no, and say why. “It’s important for kids to get used to the idea that they can’t have everything they want,” Klontz says. Tell them what your other plans are: “With our money, we’re going to choose to have a vacation together or an experience together, to us, that’s more important than things. It’s OK that you want that, maybe that’s something we can think about getting down the road, but for now, we want to spend money on doing something fun as a family. That means a lot to me.”

If you hear a child talking about money, and she seems way off base, it’s a teachable moment. “Stop what you’re doing and say, ‘What do you mean? Where did you hear that?’ It gives you a chance to clarify and challenge whatever that belief is, and help flesh it out so it’s more accurate,” Klontz says.

How do you talk to your kids about money?

Foreclosure Moratoriums

There has been a lot of talk about debate this week about the federal government issuing moratoriums on foreclosures following allegations of fraud.

Congress and the banking industry are of two minds of the issue of moratoriums.

Senate Banking Committee Chairman Christopher Dodd is planning hearings for November.

Dodd's expected hearing comes after three lenders, including Bank of America Corp., agreed recently to foreclosure moratoriums until they could determine whether or not employees signed off on affidavits without verifying the information in the paperwork. "American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud," said Dodd.

(Source: Fox News)

The heads of prominent financial and housing industry groups wrote a letter to Congress this week.

"Calls for a blanket national moratorium on all foreclosures are a bad idea and would cause significant harm to communities at risk, the unstable housing market and the fragile economy. A foreclosure moratorium would not change the ultimate outcome for borrowers impacted by this situation," they said.

(Source: Fox News)

The fallout from the hearings and the market reaction could send shockwaves through an already shaky economy.

Myths About Raising the Retirement Age

The Tax Policy Center of the Urban Institute and the Brookings Institution debunk some popular myths about raising the retirement age for social security benefits.

Myth 1: Increasing the retirement age will reduce benefits. Compared with what today's retirees get, no. Under most proposals, increasing the retirement age reduces only the rate of benefit growth from one generation of retirees to the next, as real annual benefits still grow and people continue to live longer.

Under Congressional Budget Office projections, for instance, increasing the normal retirement age gradually from 67 (where current law will put it by 2022) to 70 would still allow expected median lifetime benefits per person to increase from about $250,000 for today's people in their 50s to $360,000 for their 10-year-old kids.

Myth 2: Increasing the retirement age discriminates against low-income workers who have shorter life expectancies. Nope, and it's largely irrelevant. Low-income groups receive a disproportionate share of disability benefits, and any change in retirement age wouldn't affect those on disability or those who don't live long enough even to receive old-age benefits. There are many better ways to protect and help low-income workers.

Myth 3: Increasing the retirement age makes Social Security reform regressive. Wrong again. The progressivity of reform will be determined by the package as a whole, not by bits and pieces. Not that it should matter, then, but partly because retirement age changes don't affect those on disability, higher-income groups tend to be relatively more affected by increases in the retirement age.

By way of contrast, consider the commonly discussed reform of tweaking the annual cost of living adjustment (COLA). Whereas a retirement age change asks people to adjust when they are healthier and wealthier, COLAs compound over retirement to hit hardest those in their late 80s or 90s, whose annual benefits eventually might fall by 10 or 15 percent.

Myth 4: Social Security's Old-Age Insurance goes to the old. Not really. Social Security has morphed into a middle-age retirement system. It defines people as old - eligible for Old-Age Insurance - when they are 62. When this benefit was first made available 70 years ago, people couldn't get it until they were 65, and on average they retired at age 68 (compared with about 64 today).

If Americans were to retire for the same number of years today as they did then, on average they would work until about age 75 and, within another 60 years, to age 80. Instead, most draw benefits for about a decade more than they did when the system was first established - now approaching one-third of their adult lives. One or another partner in a couple retiring at age 62 today will probably draw benefits for about 26 years!

Myth 5: The elderly need to fear such Social Security reforms as increasing the retirement age. Of all the crazy myths that interest groups can rant, blog and tweet about, none is sillier than this one. Budget reform is around the corner, and the elderly will feel the pinch along with everyone else. Already, subsidies for Medicare Advantage plans held by the elderly have been cut back, and some tax rates are likely to rise.

But Social Security reform? Apart from the possible COLA change, not a single Social Security benefit reform option on the table would affect anyone currently older than 60. Literally, grandfathers are grandfathered into today's system. Social Security reform is almost entirely an issue for today's middle-aged and young people. Purely from self-interest, the elderly should lobby for Social Security reform because no other budget revision so totally exempts them from sharing the pain of deficit reduction.

Social Security is a huge program - its 2009 tab came to $678 billion, or about 20 percent of the federal budget - with lots of moving parts. Because the effects of the whole system matter most, the electorate and the elected need to see how all reforms fit together to make Social Security solvent and secure for all generations.

Raising the minimum age is just one of the options facing Congress and the current Social Security system.

Working at Home Tips

Working at home is a fast growing concept between small business, consultant firms, and teleworking. To most American's it is the dream job.

Fox Business gives some good tips for balancing work and everything else at home.

No. 1: Cleanliness is Next to Productiveness

Do NOT keep your office and desk space a mess – it’s a major distraction and the clutter will just provide an excuse for you to clean instead of work.

No. 2: Don’t Do “Home Work”

Do NOT get distracted by household chores, personal errands, etc. It can be so easy to get dragged into washing the dishes in the sink, doing the laundry or cleaning up the kids’ toys instead of returning work phone calls, but give those chores a certain time of day to get done. Don’t let it cut into your valuable work time.

No. 3: It’s Not Social-Networking Hour

As valuable as Facebook and Twitter may be to building your brand, do NOT fritter away your work time hunting down old flames, a former nemesis or others on such sites. That goes for getting caught up on personal e-mails, as well.

“You need every minute of your office hours and you have no time to waste on distractions and disruptions,” said Heather Allard, founder of TheMogulMom.com who started three businesses out of her home since 2001.

Added Leslie Truex, author of The Work-At-Home Success Bible and founder of Workathomesuccess.com: “Shuffling papers, reading e-mail and posting on Facebook have a part in running a business, but if not managed will waste time and money.”

No. 4: Location, Location, Location

Do NOT place your office in the middle of your house. While some may say working from the kitchen table works for them, most work-from-home experts agree that a separate room with a door is necessary if you plan to be productive.

No. 5: Make Plans to Make Time

Do NOT work without a plan – that includes routines and schedules just as importantly as a business plan. Plans also help avoid having the personal life bleed into the work one, and vice versa. A daily plan should include when to go out for lunch or throw the laundry in.
“Extra time to ‘work’ doesn't magically appear. People who work-at-home need to make time for work and for play,” Truex said.

Do you have any great work from home tips? Please share in the comments.

New Year, No Budget

Congress once again has failed to pass a budget prior to the start of the new fiscal year today.

However, a continuing resolution was passed to keep the federal government in business through December 3rd.

From the Federal Times:

Congress passed the measure to keep government functioning until after the November elections when it will reconvene for a lame-duck session and presumably finish work on more detailed appropriations for all agencies

One Senator spoke out about the measure:

Sen. Tom Coburn, R-Okla., said that the government is too large, and spending is too high for the Senate to pass a continuing resolution.

"We are not addressing what the American people want us to address, and that is for us to live within our means," Coburn said.

The continuing resolution keeps most funding at the 2010 levels.

Success Culture

How do you foster success in your business? How do you build the success concept into your employee's actions and work?

Fox News' Small Business Center answered some of these questions in an article recently.

“Culture positively or negatively affects your business,” says Marcus Erb, a consultant and senior research associate with the Great Place to Work Institute, a consulting firm that creates Fortune’s 100 Best Companies to Work For and 50 Best Small & Medium Companies to Work For in America lists. “Companies need to establish their cultural DNA early, and if you’re a smaller business, you can take control of your culture,” he says, noting that Google strategically thought about its culture early on.

What are ways this cultural DNA can be created and sustained?

In essence, there are three criteria, or ingredients, needed to create a success culture:

- Trust. Employees trust their employers and their managers.
- Pride. Employees have pride in the work that they do.
- Joy. Employees enjoy the people with whom they work.

And my favorite tip for managers...

Finally, perhaps one of the most important strategies an employer can use to create a success culture is to “start to act in the way you want your organization to act,” says Erb. “The culture starts at the top and [employers] need to take personal action to change culture.”

NBER: Recession ended in June 2009

Recession officially ended in June 2009

The National Bureau of Economic Research (NBER) issued their findings today that the recent economic downturn in the United States was 18 months long and ended in June 2009. The longest and deepest recession since the Great Depression.

The NBER acknowledged the risk of double-dip recession in its statement, but said "The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date."

The committee that made the finding said it "did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." Rather, it decided that June was when the economy hit bottom, and that it has been slowly but steadily growing since then.

The NBER has been tracking business cycles since World War II.

The NBER typically takes a long time to declare the start and end of recessions, waiting for all the economic data to be revised and finalized and making sure that any change in direction of the economy is long-lasting. It didn't declare that the recession started in December of 2007 until a year later.

In addition to looking at gross domestic product, the broadest measure of the nation's economic health, the NBER also weighs employment, industrial production, income and sales for determining when the economy changes direction.

While this is interesting from an economic and business cycle perspective, many American's are still feeling the effects of slow recovery.

September 19th - The Week Ahead

Check out what is happening in business, markets, and politics this week at Fox News' The Week Ahead.

Highlights:

Numbers come out for housing data

Numbers are expected to show slight improvement from earlier in the summer.

Reports on housing data for August are due next week, with a number of metrics to show modest recovery from July, according to Briefing.com. July is typically the strongest sales month of the year, but tax credits had pulled sales forward into April. More broadly, the industry is suffering from the expiration of the credit, as well as high unemployment and low consumer confidence.

Warning: Tax Increases May be Bigger Than They Appear

New legislation for taxes are up for debate in Congress this week. As with all rounds of tax talks there are cuts and increases mingled together.

The American Enterprise Institute had this to say about it:

In 2010, the top income tax rate bracket for ordinary income is 35 percent. Besides wages and interest income, this income category includes profits from pass-through business firms—sole proprietorships, partnerships, and S-corporations. Under the president’s proposal, the top bracket will rise to 39.6 percent. A stealth provision that phases out high-income taxpayers’ itemized deductions will also be reinstated, adding another 1.2 percentage points to the effective tax rate, bringing it to 40.8 percent. Wages and some of the pass-through income will also remain subject to a 2.9 percent Medicare tax. These 40.8 and 43.7 percent tax rates, which will apply in 2011 and 2012, match the 1994 to 2000 rates—the same top bracket, stealth provision, and Medicare tax were in place then.

But the picture changes in 2013. Under the healthcare law adopted in March, the Medicare tax will rise that year, from 2.9 to 3.8 percent. Also, a new 3.8 percent tax, called the Unearned Income Medicare Contribution (UIMC), will be imposed on high-income taxpayers’ interest income and most of their pass-through business income that’s not subject to Medicare tax. So, under the president’s proposal, virtually all of top earners’ ordinary income will be taxed at 44.6 percent, starting in 2013. We’re not just going back to the Clinton-era rates of 40.8 and 43.7 percent.

A similar pattern holds for capital gains. Under the president’s plan, in 2011 and 2012, the top rate on gains, now 15 percent, will go to 20 percent, with the stealth provision adding 1.2 percentage points, sending the tax back to its 1997–2002 level of 21.2 percent. Starting in 2013, though, capital gains will also be hit by the UIMC, pushing the rate to 25.0 percent.

This will push the top tax rates for most income above Clinton-era levels by 2013.

Best Cities to Survive the Recession

CNNMoney.com reports on America's most recession-proof cities with the 20 strongest and 20 weakest cities.

Leading the "Strong" list: Omaha, Nebraska
Overall, the Wisconsin to Texas corridor is holding up quite well.

Leading the "Weak" list: Las Vegas, Nevada
Followed closely by major cities in California and Florida.

Apparently the Bible Belt is a better place to be during a recession than "Sin City". Just food for thought..