As of Jan. 1, the wealthiest Americans -- those in the top 1 percent -- will have to pay more in federal income taxes. About 6 percent, according to the Tax Policy Center. That’s the highest rate the 1 percent has paid since 1979. But federal income tax is just one part in the incredibly complicated tax system. Overall, the 1 percent are actually paying less in taxes than they were in ‘79 and the 1 percent looked very different then, than they do today.
Let’s start with the obvious differences. If you were a 1 percenter in 1979 you didn’t have a cell phone or an iPod. You probably had a tape deck that you used to listen to the number one album of the year, “52nd Street,” by Billy Joel. I would venture to guess that your favorite song was “Big Shot.”
From now on I will refer to 1 percenters as big shots. The average income for a 1979 big shot adjusted for inflation was about $413,000.
Jon Bakija was one of the authors of a paper titled “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data." He says, “The Congressional Budget Office estimates that all fed taxes were about 35 percent of income for people in the top one percent of the income distribution in 1979.”
That’s the same as the new rate for big shots in 2013. Today the average income of a big shot is $1.4 million.
So let’s say we bring a 1979 big shot into the present to buy a house in one of the 10 wealthiest zip codes in 2013 America.
If the 1979 big shot follows the golden rule and doesn’t spend more than 30 percent of gross income on the monthly mortgage payment, it would take the 1979 big shot 30 years to pay off the average house in one of those wealthy neighborhoods. It would take today’s big shot about nine years.
So why are big shots so much wealthier today? Partly it has to do with the people in the 1 percent who work in finance. “You know the Wall Street types the hedgefund types,” says Steve Kaplan, who teaches at Chicago Booth.
Statistically speaking, the percentage of people working in finance hasn’t changed much in the last 35 years. But those big shots who work in finance are earning in 3.5 times more of the nation’s income than they were in 1979.
And much of that income is not subject to federal income tax. When you factor all the taxes other than income -- like payroll, state and local -- the wealthiest 400 big shots in America today pay about 16 percent taxes on their income. Using those same calculations the average American pays 22 percent.
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Tell someone that they're acting like a salesman, and they'll probably take it as an insult. Call 'em a used-car salesman, and a fist fight might ensue. The reality, however, is that we're all salespeople in one way or another. And if you're not selling yourself and your ideas, you may be missing the boat both in life and in work. One in nine people in the U.S. workforce are in sales. But Daniel Pink, author of "To Sell is Human: The Surprising Truth About Moving Others," says the other eight in nine are in sales too -- they spend an enormous part of their time persuading, influencing, and trying to get people to part with resources like time and effort. Like it or not, we're all in sales now, says Pink.
"We're interacting with people. We want people to see things our way. We want to help people join us in making things a little bit different. And all of those are elements of sales. The thing is, in order to do it well, you don't have to be more sleazy, you have to be more human. You have to understand where people are coming from. You have to make things clear to people. You have to talk in ways that resonate with them and that they can process easily. So this idea that sales is somehow inherently slimy is a relic," says Pink.
Pink says one of the myths about selling is that extroverts make the best salespeople. In fact, strong extroverts and strong introverts are terrible salespeople, says Pink. The people who succeed most are in the middle and known as 'ambiverts.'
"[Ambiverts] know when to push. They know when to shut up. They know when to assert. They know when to hold back," says Pink. "In the distribution of introversion and extroversion in the population, women tend to be a little bit more ambiverted. Women test higher on empathy, which is a facet of attunement and women in general are better listeners."
Nowhere is selling more important than in finding a job. You’re selling your talent, your background and more to a potential employer. Here are four tips from Daniel Pink on how to make the science of selling yourself work for you:
1. Emphasize potential.
You might think that the key to landing a job is to emphasize your experience. And, yes, experience matters. But researchers at Stanford University and Harvard Business School have shown that potential can matter more. When people evaluate talent, they often find potential more interesting than accomplishment. Why? It’s uncertain. That uncertainty can lead them to think more deeply about the person they’re evaluating – and this more intensive processing can lead to their generating more and better reasons why the candidate is a good choice. So don’t fixate on what you achieved yesterday. Emphasize the promise of what you could accomplish tomorrow.
2. Don’t hide every blemish.
Suppose your otherwise gleaming resume has a small scratch – a job that didn’t last very long or a project that went south. Your instinct might be to conceal it. But consider an alternative approach. Stanford University researchers have identified what they dub “the blemishing effect.” In short, adding a small dose of (honest) negative information can be more persuasive than presenting an exclusively positive picture. The minor negative serves as a contrast that makes the mostly glowing total portrait shine more brightly. But beware: The researchers found that the negative information must follow the positive information, not the reverse. So mention getting fired from that barista job only after you’ve talked about your Nobel Prize.
3. Prepare for the only interview question that matters.
Job interviews, research shows, are surprisingly poor predictors of who’ll make a star employee. Indeed, only one interview question seems to have any predictive value: What do you know about this company? Use this to your advantage by being prepared to answer that question even – especially -- if it never comes up. What do you know about this company? is a proxy for conscientiousness. It demonstrates that you did your due diligence, which signals that you’ll be equally diligent when you take the job. What’s more, a smart response shows that you want to work for this particular outfit – not that you’re merely desperate for a job. Arrive armed with this answer and offer it up even if your interviewer never asks the question.
4. Be a problem-solver and a problem-finder
In any sales encounter, attuning yourself to the buyer – understanding her perspective and interests – is essential. In job hunting, that means understanding your prospective employer’s problem. Remember: The organization isn’t simply trying to fill a seat. It’s hoping to solve a problem – to get code written, pizzas delivered, or patients served. But don’t stop there. Take a page from the work of the late University of Chicago social scientist Jacob Getzels and the legendary psychologist Mihaly Csikszentmihalyi. In their landmark studies of creativity, they discovered that the very best artists were skilled problem finders. Instead of merely solving existing problems, these artists found new and intriguing ones to tackle. You can do the same: Identify problems your prospective employer doesn’t realize that it has – and you can be an artist of the job search.
Daniel H. Pink is the author of To Sell is Human: The Surprising Truth About Moving Others.
This week, the Dow Jones Industrial Average partied like it was 1999, which was the first time the index first closed above both 10,000 and 11,000. But is the financial gravy train going to keep chugging now that we're once again in record territory? Nearly all of us have skin in the game -- our retirement funds, our kids, college funds. Should we be rethinking our investment strategies with the Dow above 14,000? And if we've been on the sidelines, is it too late to get into stocks? To answer those questions, we're joined by Ken Winans, a portfolio manager and founder of Winans International.
"The markets are moving in a positive direction and there's an awful lot of really good companies that are doing very well right now," says Winans.
Some analysts say we are at the outset of an enormous bull run, so should investors rethink their allocation between stocks and bonds? Go a little heavier in stocks at the moment?
"Yes. Not to be in equities in the long term and not to be in good companies is technically a mistake. Now, you can find corporate bonds out there that are paying 5, 6, 7 percent. For a lot of retirees or people nearing retirement, I think that makes a lot of sense because you will need income when you retire. If you're young and you've missed the bond market rally and you are looking at where [to] put new money, I think you have to lean toward equities," says Winans.
Winans says it's not too late for people to jump back into the market, but he warns that nothing goes straight up. Plus, there's also a seasonal issue within the markets. In April, people will have to pay some large tax bills. Winans says he wouldn't be surprised to see people have to sell some of their stocks to pay those bills -- so there could be a temporary lull going into April. And the continuing budgetary problem could impact the markets as well.
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Economists expect to hear that there were about 160,000 jobs added to payrolls in February. The jobless rate likely stayed near 7.9 percent. Slow job growth and stubbornly high unemployment likely continued.