The middle class musician

[BlueStrat]

 

Where'd you get these numbers? Have a link? To an official source? And what exactly ARE these numbers? When you say "top 1%", are you saying "of 100 million earners, the one million individuals who have the highest declared wage income"? Or "the one million who have the highest individual total annual compensation ?? Or is that top 1% as measured against an average earner, which would skew those numbers? You need to be clearer. Then we'll get to your contentions.

 

 

 

Actually, I erred. The top 10% pay 70% of all taxes collected. http://www.taxfoundation.org/news/show/250.html

[gtrbass]

According to US census bureau, in 2003 the median income per houshold was $43,000. The threshold for the top 10% and above is $154,000.

A 2006 analysis of IRS income data by economists Emmanuel Saez at the UC Berkeley and Thomas Piketty at the Paris School of Economics showed that the share of income held by the top 1% was as large in 2005 as it was in 1928. The data revealed that reported income increased by 9% in 2005, with the mean for the top 1% increasing by 14% and that for the bottom 90% dropping slightly by 0.6%.

The median household income in the US remains slightly higher than in the UK and Ireland, yet lower than that of Switzerland. It is important to note that the differences in median household income between US states can be as large as those between the developed nations. The median household income of the UK, for example, is comparable to that of Florida or South Carolina, while Switzerland is comparable to New Jersey or New Hampshire.

The more affluent pay their far share. All I will say is that I pay more in taxes annually than the median income household earns...

[daddymack]

Our Tax System Explained: Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I got"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.


For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

[Dean Roddey]

The median household income in the US remains slightly higher than in the UK and Ireland, yet lower than that of Switzerland. It is important to note that the differences in median household income between US states can be as large as those between the developed nations. The median household income of the UK, for example, is comparable to that of Florida or South Carolina, while Switzerland is comparable to New Jersey or New Hampshire.

 

 

You do though need to consider cost of living. $43000 in rural Mississippi is probably about as good as $150K in Silicon Valley.

[sabriel9v]

You do though need to consider cost of living. $43000 in rural Mississippi is probably about as good as $150K in Silicon Valley.

Good point

[Dean Roddey]

Actually, it's probably better. All my relatives and friends in rural South Carolina own homes and probably don't even make the median. I was earning $125 to $150K a year there before I went out on my own and I couldn't have even considered buying a house here.

[Scafeets]

 

... As far as the top 1% is concerned, you're right, but I'd also add than never in the history of the country have so few payed so much of the total revenue payed in to the government. They may possess 20% of the wealth, but they pay about 40% of all income taxes collected; the top 5 % pay 50%, and the top 10% pay 60%. The bottom 10% pay 0.

 

 

You're right about the wealthy paying a higher percentage of income tax. However, that doesn't include sales tax, which disproportionately affects the poor and working poor.

 

And while the wealthy pay more, percentage-wise in income tax, they also shelter a tremendous amount from ever being collected via foundations, tax exempt bonds, offshore investments, deferred income, lower rates via capital gains and of course, being in the "lucky sperm club' (then bitching about inheritance taxes.)

[the-good-way]

The next night the tenth man didn't show up for drinks

 

 

Following the analogy, I think that would be tax evasion

[Scafeets]

 

Actually, I erred. The top 10% pay 70% of all taxes collected. http://www.taxfoundation.org/news/show/250.html

 

 

That would be "federal, individual income tax" which takes corporate tax, trusts, LLCs and a bunch of other tax shelters out of the equation.

 

And Hickabee's "Fair Tax" is a bunch of jive: While it will give some relief to families earning less than $30L, every taxpayer between 30 and 200K pays more, while those making over $200K would pay less.

 

Instead, how about some legislation that requires American companies to move their headquarters out of Costa Rica and pay their fair share of taxes?

[BlueStrat]

 

corporate tax,

 

 

There is actually no "corporate tax"; in reality is just gets passed on to consumers. Which is why the mantra we hear of "getting corprations to pay their fair share" is just silly and being proposed by people who don't understand how business works. Other countres, like Japan, don't have any corprorate tax, because they know it just ends up being another consumer tax and drives more businesses out of the country in order to sell their products cheaply.

 

FWIW, I read recently that the US corporate tax rate is among the highest in the world, including most Europeran countries. Gee, I wonder why so may companies are relocating?

 

And any legislation requiring any companies to move anywhere would be a move toward classic Fascism I'm not comfortable with.

 

Hoo boy, did this thread ever get hijacked!

[Scafeets]

 

There is actually no "corporate tax"; in reality is just gets passed on to consumers. Which is why the mantra we hear of "getting corprations to pay their fair share" is just silly and being proposed by people who don't understand how business works. Other countres, like Japan, don't have any corprorate tax, because they know it just ends up being another consumer tax and drives more businesses out of the country in order to sell their products cheaply. FWIW, I read recently that the US corporate tax rate is among the highest in the world, including most European countries. Gee, I wonder why so may companies are relocating? And any legislation requiring any companies to move anywhere would be a move toward classic Fascism I'm not comfortable with. Hoo boy, did this thread ever get hijacked!

 

 

Yeah...tax threads tend to go astray.

 

"There's no corporate tax"?

Check this out: http://en.wikipedia.org/wiki/Corporation_tax

 

 

No Corporate Tax in Japan???!! You must be kidding. Read this:

http://www.venturejapan.com/japanese-business-tax.htm

 

 

What complicates matters in the US is that we have both state and federal corporate income tax. That hasn't stopped a lot of major corporations from avoiding payment, though.

 

Sounds like you're buying into the whole "trickle down economics" B.S. of the 80s. Bush the Elder was right when he called it "voodoo economics" and the policy earned us the first Trillion Dollar Deficit as a result. The days of saying "what's good for G.M. is good for the economy" are over.

 

Yes, the US corporate tax rate is among the highest (4th according to KPMG) but that's the rate, not what actually gets paid. As Tom Waits says; "The large print givith and the small print taketh away."

 

There are so many loopholes in the US Tax Code that most corporations pay a small percentage of the rate, leaving the rest to us civilians to pay a larger burden.

[Dean Roddey]

He wasn't saying that there's no actual corporate tax, but that corporations set their prices based on their expenses and taxes are an expense, so they cover them in the price of their products as much as possible I don't know that that's true, just pointing out that he was saying something different from what you are saying. It doesn't matter if I'm taxed by 10% if I can just charge 10% more. Yeh I still have 10% of that extra 10% to cover, but still, I'm passing on most of it to you the customer. I think I got that math right, though I'm notoriously bad on that front.

[Scafeets]

 

He wasn't saying that there's no actual corporate tax, but that corporations set their prices based on their expenses and taxes are an expense, so they cover them in the price of their products as much as possible I don't know that that's true, just pointing out that he was saying something different from what you are saying. It doesn't matter if I'm taxed by 10% if I can just charge 10% more. Yeh I still have 10% of that extra 10% to cover, but still, I'm passing on most of it to you the customer. I think I got that math right, though I'm notoriously bad on that front.

 

 

Sorry - it just sounds like more free-market jive to me.

 

Of course corporations are going to charge consumers as much as the market will bear, while paying their employees the absolute lowest in wages and benefits and the legal minimum in taxes -- to provide the absolute maximum in "shareholder value" -- i.e. dividends , stock valuation and monstrous executive bonuses, benefits and golden parachutes.

 

And when all that fails, they go bankrupt or sell out to private equity firms (providing tax-free investments to millionaires) that are built on the premise that most companies are worth more when you break them up, downsize them or get rid of US-based employees.

 

That's not only good capitalism --- it's considered smart and prudent corporate leadership. Without laws specifying minimum wages (and benefits in most civilized countries) and taxes, companies aren't going to volunteer for this stuff. They would rather spend billions on lobbyists to keep their operating expenses, regulations, foreign competition and taxes to a bare minimum.

 

The "prevailing wisdom" that the business community would be better off without the constraints of regulation and the burden of a fair tax system is wholly without merit. The reason that Toyota, Honda, Sony, BMG, BMW, Siemens and thousands of other companies are investing heavily in the US is not only to be closer to the consumer market. They're building plants and hiring employees here because the US is the most corporate-friendly place to put a business.

[Dean Roddey]

Of course corporations are going to charge consumers as much as the market will bear, while paying their employees the absolute lowest in wages and benefits and the legal minimum in taxes -- to provide the absolute maximum in "shareholder value" -- i.e. dividends , stock valuation and monstrous executive bonuses, benefits and golden parachutes.

 

 

If you are in a job that a hundred million other people can do just as good as you can, then you are probably going to get paid minimum wage. But that's not the case in the skilled professions. If you want to get paid more, you have to be able to do something that is in demand and that fewer people are good at than the need for those people. It's kind of brutal but that's the way it is.

 

I do agree that a fairly strong hand needs to be kept on the reigns of businesses, not because businesses are in and of themselves corrupt, but because people are corruptable when the possibility is presented to them. There are plenty of examples of businesses that are run responsibly, we mostly only hear about those that aren't.

[Scafeets]

 

If you are in a job that a hundred million other people can do just as good as you can, then you are probably going to get paid minimum wage. But that's not the case in the skilled professions. If you want to get paid more, you have to be able to do something that is in demand and that fewer people are good at than the need for those people. It's kind of brutal but that's the way it is. I do agree that a fairly strong hand needs to be kept on the reigns of businesses, not because businesses are in and of themselves corrupt, but because people are corruptable when the possibility is presented to them. There are plenty of examples of businesses that are run responsibly, we mostly only hear about those that aren't.

 

 

Agreed. There's also the "lucky sperm club" factor. Why are Fords still running that company into the ground? Is Steve Forbes really the most qualified guy to run Forbes?

Hank Steinbrenner???!!!!

 

The other aspect to the lucky sperm club: I'm a firm believer in bootstraps and all that, but most CEOs were shot out of a cannon: Private schools, top-tier universities, family connections, etc.

 

But yeah.... the way things are just encourage corporate leaders to be greedy, heartless bastards. I do disagree that "we only hear about those that aren't." The leaders of the ones that aren't are generally regarded as wimps and weirdos. Good corporate citizenship is rare enough to be noteworthy, and it should be the other way around. The thousands of off-shore corporations owned by Americans that are destroying the environment, raping company assets, avoiding taxes and sending jobs overseas should be the story.

[Dean Roddey]

There's something like 5 million corporations in the US. The vast bulk of them are inevitably going to be small and medium sized and aren't in any position to be raping much of anything, or to have much in the way of international entanglements. The numbers I've seen are that the average CEO comprensation (all included) is something like $10M to $15M a year, which is good, but hardly monster sized. It's really that much smaller number of very large corporations that have the monster CEO salaries and having their fingers in countries all over the world. I'd imagine that the bulk of those CEOs of those 5M companies probably have fairly average advantages in life.

I'm one and I only have a high school education.

[Scafeets]

 

There's something like 5 million corporations in the US. The vast bulk of them are inevitably going to be small and medium sized and aren't in any position to be raping much of anything, or to have much in the way of international entanglements. The numbers I've seen are that the average CEO comprensation (all included) is something like $10M to $15M a year, which is good, but hardly monster sized. It's really that much smaller number of very large corporations that have the monster CEO salaries and having their fingers in countries all over the world. I'd imagine that the bulk of those CEOs of those 5M companies probably have fairly average advantages in life. I'm one and I only have a high school education.

 

I'm all in favor of any sized corporation making whatever they can in profits, as long as they do it responsibly. I guess my tirade was just a reaction to the often-heard comments that taxes and regulations are killing American businesses. The flacks and flunkies (PR machines, lobbyists, right-wing talk-show hosts, etc.) have been "working the refs" for a long time and they have a large portion of the American public believing their crap that US businesses are over taxed and over regulated.

 

Saying it over and over doesn't make it true, and equating responsible corporate behavior with Fascism is indefensible.

 

Back to the OP: Let's define the "Middle Class Musician"

 

To me, it's a person who can support a family with decent food, housing, education and health coverage. That requires a different amount of income depending on where you live, but I guess it means you would have to at least make as much as a manager at the local Home Depot or McDonald's.

 

And that ain't easy to do playing music.

[Dean Roddey]

And you don't even get to steal some fries to take home at the end of the day.

[BlueStrat]

 

He wasn't saying that there's no actual corporate tax, but that corporations set their prices based on their expenses and taxes are an expense, so they cover them in the price of their products as much as possible

 

 

That's exactly what I'm saying. And those taxes hurt the lower economic tier the most.

[Scafeets]

 

That's exactly what I'm saying. And those taxes hurt the lower economic tier the most.

 

 

How? Prices are set by supply and demand - and competition.

[Scafeets]

And you don't even get to steal some fries to take home at the end of the day.

 

You mean free beer doesn't count?;)

[dndoseller]

Everything that made the music industry what it is, is now in the hands of anyone:

Recording technology (any digital recorder)
Distribution (cdbaby)
Marketing (myspace, youtube, etc.)
Copyright (worthless now)

Thats what the industry has to deal with and why there are what you are calling middle class musicians. The labels hate it and don't know what to do about it...they have to work harder than ever just to break even.

[BlueStrat]

You mean free beer doesn't count? ;)

 

Thankfully, the places we play still offer that!

 

 

(though I don't drink, so it doesn'r benefit me~

 

Sometimes, because I like Diet Pepsi, venues will want to charge me $1 for a can but give the rest of the band free drafts.

[BlueStrat]

 

How? Prices are set by supply and demand - and competition.

 

 

 

Because when prices are raised to cover the cost of taxes, lower income people pay a larger percent of their income to pay them. Gasoline is a great example of this. In Washington State, about 1$ a gallon goes to state, federal and local taxes. 3 dollar a gallon gas hurts the guy earning $1200 a month more than the guy earning 12k a month, no?

 

And, while prices are set by supply and demand, taxes aren't. No business that has to maintain a profit margin is going to absorb taxes. And when all corporations get taxed, all prices rise, so competition isn't a factor in taxation.

 

Basically, corporate taxes end up being largely a VAT tax.

[Scafeets]

 

Because when prices are raised to cover the cost of taxes, lower income people pay a larger percent of their income to pay them. Gasoline is a great example of this. In Washington State, about 1$ a gallon goes to state, federal and local taxes. 3 dollar a gallon gas hurts the guy earning $1200 a month more than the guy earning 12k a month, no? And, while prices are set by supply and demand, taxes aren't. No business that has to maintain a profit margin is going to absorb taxes. And when all corporations get taxed, all prices rise, so competition isn't a factor in taxation. Basically, corporate taxes end up being largely a VAT tax.

 

 

Well, we're never going to see eye to eye on this one.

OTOH -- paying for cokes on a club gig is just freakin' weird. Have you thought of writing the cokes and beer into the contract? That seems to work in most places that don't use common sense.