Middle Income is Not $250,000!

October 23, 2012Danny Vinik Leave a comment

The Tax Policy Center’s Howard Gleckman points out the 10 biggest differences in President Obama and Mitt Romney’s tax plans in his newest piece. At the end, he points out a couple of ways that the candidates are similar:

And both apparently believe that households making up to $200,000 or $250,000 are middle-income.

It’s amazing that we just gloss over this like it’s okay. Gleckman is right here. Romney deems the high-end of middle-income Americans to be $250,000 while Obama has continually pushed to raise taxes on high-income Americans, starting at $250,000.

In what world is making $250,000 a year middle class? Or $230,000? Or $200,00?

Here’s the Census Bureau’s 2011 estimates for household income and where that falls across America:

	United States
	Estimate	Margin of Error
Quintile Upper Limits:
Lowest Quintile	20,585	+/-48
Second Quintile	39,466	+/-89
Third Quintile	63,001	+/-119
Fourth Quintile	101,685	+/-108
Lower Limit of Top 5 Percent	187,087	+/-436

The 95th percentile of Americans makes $187,087 a year! And yet, we’re okay saying that earning $250,000 a year is the upper limit! Once you look at the numbers, it’s crazy but we’ve grown to accept it.

Why? I’d hypothesize that people making $250,000 really do believe that they’re in the middle class. They hear all about these millionaires and billionaires and don’t put themselves in the same category as them. And it’s true, they aren’t in the same category: those billionaires and millionaires are at the high level of upper class, but households making $250,000 a year are certainly still upper class.

But this also works in the opposite direction as well. People at the other end of the spectrum dream of making it to the middle class. They want to believe that making $250,000 a year is middle class because that sounds attainable for them. If we were to drop the upper limit of middle-class down to the 80th percentile – $101,685 – people in the lowest 20 percent would probably find themselves disheartened. Yes, low-income households dream of making $100,000 a year but they also dream of a lot more. If we lower the upper limit of the middle class, we may cut back their dreams.

Of course, that’s just a hypothesis. But it doesn’t make it okay for the media to let this lie permeate across every campaign, tax proposal and policy statement. It’s tough to make arguments about the tax code when we are so clueless about what income level constitutes the middle class.

Debate Reaction

October 23, 2012October 23, 2012Danny Vinik Leave a comment

The final debate came and went last night and if you follow me on my twitter, you saw absolutely nothing from me on it. Why? A couple of reasons:

First off, I had the luxury of watching with my class of students with none other than Karl Rove. He debated Howard Dean earlier during the day at Duke and stuck around to watch the debate with us. Of course, we were all focused on the actual debate but it was still very cool to be sitting just a few feet away from him during it.

But, plenty of my classmates were on Twitter during it and Rove was as well. I chose to stay off because I wanted to judge it without the nonsense of Twitter. I thought last night was particularly partisan. The first debate Romney clearly won in a landslide. Obama won the second by a little. But throughout last night’s debate and afterwards, any Democrat or left-leaning journalist I follow seemed to think Obama dominated and any Republican or right-leaning journalist thought Romney dominated. It was split decisively along party lines. It was quickly clear to me that I wasn’t going to get much from reading Twitter and I certainly wasn’t going to add anything to the discussion as well. So I stayed away and I’m glad I did so. It actually felt kind of nice to watch the debate away from social media (mostly – I snuck a peek every once in a while).

President Obama and Mitt Romney during their third and final presidential debate.

As for my thoughts on the debate, I thought it was a dead draw. Obama responded well on Israel/Iran while Romney seemed to do better on China (something that infuriates me – more on that later). I thought the rest of the issues were about even. The polling after the debate seemed to show a Obama victory, but remember my way of judging the debates: the winner is the person who convinces voters to vote for him.

Here are the snap polls:

CNN:

Who won the debate? Obama 48%, Romney 40%

Who are you more likely to vote for? Unchanged 50%, Romney 25%, Obama 24%

Public Policy Polling:

Who won the debate? Obama 53%, Romney 42%

Are you more or less likely to vote for President Obama?

More likely 37%
Less likely 31%
Unchanged 30%

Are you more or less likely to vote for Governor Romney?

More likely 38%
Less likely 35%
Unchanged 26%

CBS News:

Who won the debate? Obama 53%, Romney 23%, Tie 24%

Once again, CBS annoys me and doesn’t have any more info on their polls (or if they do, someone please point it out to me). As for the CNN and PPP poll, clearly it was about a draw. The PPP poll actually shows Romney with an advantage among independents. Thirty-two percent of independents said they were more likely to vote for Obama after the debate while 47% said they were less likely. In contrast, 47% of independents said they were more likely to vote for Romney afterwards with 35% saying they were less likely.

Some numbers point towards Obama, some towards Romney and my gut reaction was a tie. Thus, I’m going to call it a tie until I see further polling. We (and by we, I mean Nate Silver) will have plenty of polls to sort through during the next two weeks. (Image via)

Fixing “Countdown to Craziness”

October 19, 2012October 19, 2012Danny Vinik Leave a comment

Here at Duke, tonight marks the official beginning of basketball season with “Countdown to Craziness.” Fans pack into Cameron Indoor Stadium to hear the team introduced, see a split-squad scrimmage and a slam dunk contest afterwards. Sounds thrilling, right? Wrong.

I’m about as big a Cameron Crazy as they come. I’ve tented all four years and never been worse than tent #8. I’ve been to every Duke basketball game that I’ve been in Durham for. My friends can attest to my Cameron Craziness.

But even I don’t get excited for Countdown to Craziness. It’s become such an absurd event and is actually really awkward. During the scrimmages, fans have no idea to cheer for. There’s obviously no taunting, “air ball-ing,” or other defensive chants. You cheer each time a team scores and that’s about it. It’s fun to see the players red shirting who we won’t get to see the rest of the year (Rodney Hood this year and Andre Dawkins – though I’m not sure if he’s playing tonight). But it’s really just strange.

The introductions are cool, though a bit over done. Certainly, Nolan Smith’s entrance in my freshman year (0:52 second mark) to Jay Z’s “Public Service Announcement” was pretty great. But most entrances are just too over-the-top.

And then there’s the dunk contest. In my three years at Duke, I haven’t seen a dunk in the contest yet that has wowed me. There have been some good ones but nothing great and there have also been a lot of not-very-good ones. Of course, most dunk contests in recent years at any level haven’t been great (oh how I long for the days of Vinsanity).

But the worst part is the event has lost it’s true meaning. “Countdown to Craziness” used to occur at midnight when NCAA rules first allowed the team to practice. At midnight the team would come out and have its first practice, with fans cheering them on. Now, that’s cool. That rush of the clock striking midnight and the team coming out, ready to practice as soon as possible means something.That’s what Countdown to Craziness should be.

Duke began practicing last week though and already have taken a trip to Fort Bragg. It’s not the beginning of the season. It’s just an awkward event to show off the team and impress recruits (a number of important ones will be in attendance tonight). Normally, Countdown to Craziness is on the first day the team is allowed to practice. That does make it better. I’m not sure why it’s pushed back a week this year – most teams had their “Midnight Madness” last Friday. But even then, it’s still not at midnight.

Nevertheless, it’s still a chance to see the team up close and have some fun. And wit that, I’m off to go get in line.