Rather than trying to put caps onto salaries, in an attempt to prevent runaway wage growth, why don’t we just set up a progressive income tax such that: the more you make, the higher your tax bracket?

Everyone can start out with a base deduction plus social security insurance, health insurance and state/local tax costs, and then pay a flat rate at various steps thereafter.

My steps would be tied to the median household income (MHI) . For every multiple of the MHI, the tax rate would increase. The actual tax rate should be set such that the federal budget would be balanced i.e. the government will collect enough money to cover its expenditures for the year.

The base deduction for a single individual should be 40% of the MHI. For a household, the base deduction should be the MHI.

Once again the discussion of minimum wage is coming to the forefront of political discussion. There is a lot of vocal support for a $15 an hour minimum wage. I think that is a few dollars more per hour than necessary for a national minimum wage.

A minimum wage should be able to provide the wage earner with a basic living wage. The national poverty level for a family of four is in the neighborhood of $24,000 a year. A person working full-time, 40 hours a week, 50 weeks a year will work 2,000 hours a year. Using these numbers, $12 an hour is a reasonable minimum wage – nationally.

Now, within some urban areas (Metropolitan Statistical Areas) the effective poverty level for a family of four is much greater than national level and it would be very appropriate to tie the minimum wage to HUD’s Extremely Low Income for a family of four for an area, or to the national poverty level for a family of four, whichever is greater. Such that, in San Francisco, the ELI for a family of 4 is $44,000 so a minimum wage for that area should be $22 an hour. In Seattle, the ELI is $32,100, which would lead to a $16.50 per hour minimum wage. In the Bronx, the ELI is $31,300, which will lead to a $15.65 per hour minimum wage.

We have the facts and figures derived from the various government departments that track this data, such as the Census Bureau, HUD, Social Security, the Fed, HHS, etc. Let’s use this data responsibly and keep on top of the growing economy and the wage gap. And the numbers can change every year as the economy grows and we don’t strand people at an old wage for many years while the politicians pontificate.

I came across this link to SSA income data. I see that the average salary/wage is growing faster than the median salary/wage. So this shows that the majority of the workers continue to get more and more relatively poorer than the “average” worker.

In the upper left of the SSA page is a link to yearly breakdowns of the annual wages. Here is a link the 2017 numbers. It shows the breakdown of the number of earners in each income band, up to 205 people who earned more than $50,000,000. The total of those 205 people was $19,954,445,874.88 for a average of $97,338,760.37 each.

In 2016, only 143 people earned more than $50M with an average of $100.7M each.And in 2015, it was 202 people with an average of $91.4M each. Looks like a lot of volatility at the top.

An interesting page to fiddle with to see where the inequity grows.

It occurs to me that people who make large amounts of annual income in the United States do so because of the general infrastructure that the US provides. All the way from easy transport, financial support, security protections, and a stable business environment, along with a lot of other good things. People who can take advantage of all these positives, demonstrated by increasingly large incomes, don’t think they should pay for it. Let the working stiffs, who are barely surviving from paycheck to paycheck, who aren’t benefiting from the glorious infrastructure that America provides, pay the bulk of the cost. This doesn’t seem fair or equitable.

I really do wish that they (the powers that be) would take social security income and outgo off the budget books.  In my earlier post I was talking about a $3.8 trillion budget, but 880 million of that is Social Security which is already covered by the Trust Fund and should be ignored for our calculations.

So let us use a budget figure of $2.9 Trillion

$13.1 Trillion in total personal income.

$6.1 Trillion in deductions.

$7 Trillion available income to cover the budget.

Then a 41% tax on all income over $53,000 will cover the budget.

Alternatively, looking at the 2013 budget broken out, if we take the income tax income – $1.36 Trillion ($1,359 Billion) and add the deficit – $0.9 Trillion – Then we need to cover $2.26 Trillion and the remainder to $2.9 Trillion is covered by the estate, corp, etc. taxes.  Oops, they are including $959 Billion of SSA trust income which is $76 Billion greater than the SSA outgo and we want to keep the SSA out of the calculation so lets add the $.076 Trillion to our total and we need to cover  $2.34 Trillion to meet the budget.

So a 33% tax on all personal income over $53,000 should be able to meet the 2013 budget.

I am using high level swags here. The $6.1 Trillion in deductions is really a worst case where everyone in the low median half is counted with a $53K income. A more realistic total deduction is probably less than $5 Trillion since the total income of the lower median group is less than $2 Trillion and the total deduction would be the $3.1 Trillion from the higher median group and the actual total income of the lower median group.

My google-fu is weak. I am trying to find out what percentage of the total annual personal income is for the folks in the  lower median group, and I can’t find an exact number. It appears to be in the 20-25% range, or lower. I saw one graph that might have been 15%.  So if the Total income is $13.1 Trillion the Lower Median total income is somewhere in the $2 Trillion-$3 Trillion range

I have some numbers (rounded) to put in the pot.

$13.1 Trillion is the total personal income in the US.
116 Million Households in the US.
$53,000 Median household income. (half of the households make $53K or more, half make less.)
$3.8 Trillion 2013 Budget

Pay for the Budget –
Give all households a $53K deduction. – $6.1 Trillion
Total Income after the deduction – $7 Trillion

Tax Rate on post deduction income to cover the budget – 54%

So, put a 54% tax on all income over $53,000 and there is no more deficit. There are no other deductions. Simplified tax code.

And we can use the corporate taxes to pay down the debt.

(I hate it when I make stupid math errors in public)

I am curious as to what the powers that be are thinking in regard to net neutrality.

To use an analogy to the transportation system, the current internet is like a railroad network. Freight trains are loaded with containers destined for delivery to end users. When the train pulls into a railyard, the containers are picked up from one train and moved onto another train heading towards the ultimate destination. Eventually the containers get to the proper destination but they don’t necessarily follow the quickest, most direct path. The tracks are owned by various companies and those companies probably own the railyards their tracks lead to. (But they can’t own the content that is carried by the railroad, which is where the analogy breaks down.)

The railyard protocols determine which containers get handled and in which order they are handled. The new net neutrality rules seem to be allowing the railyards to revise their protocols to let some container shippers to pay for priority handling. They may even establish separate railroads just for the priority traffic and let the existing infrastructure muddle along, just like AT&T did with the telecommunications network in the post-war period.

This is a hard one to address. On one hand, the networks cost money to build, the routers that can handle the traffic cost money to install, the features cost money as well. If a service provider requires lots of bandwidth capacity and router ports, the user should be paying an appropriate cost. The service provider also needs to increase the bandwidth capacity interior to the network to handle the increased usage. So they should be charging the source provider enough to cover the bandwidth and equipment costs generated.

Most of the new internet services seem to be streaming video related. and with streaming video speed and order of the incoming info containers is important. If you could let your computer collect the entire stream of video before displaying it then it wouldn’t be an issue. But a lot of those video providers don’t want to let you have the entire video at one time. Why, you may pirate the video; shame on you. So they need to have your videos delivered piecemeal but in an evenly streamed manner. To get this requires using the prioritization flags in the Internet Protocol. And who should get those flags? The ones that pay for them.

What should not be allowed to happen is getting someone’s container dropped completely, based on either originating address or destination address. The ISPs have already been guilty of this (e.g. the early VOIP services) and will probably bend any new FCC rules to continue being guilty of this in the future.

The internet is a network of networks. The backbone networks connect to edge networks or other backbone networks to facilitate the movement of those information containers.  An intranet may be considered a single network managed and operated by a single entity.  As an example, the Verizon backbone network connects to the European backbone, to the Canadian backbone, to the AT&T backbone, to the Comcast edge network, to the Time Warner edge network, to the Verizon edge network, etc. (I am using edge network to describe the networks that connect to the users, both senders and receivers. Unless you are going right around the corner you will probably traverse a backbone network to connect with someone on the web.)

In my example I used the Verizon backbone network and noted that it is connected to the Verizon edge network. And in reality the two networks may not be distinguishable as far as routers or links are concerned. For Verizon it may all be one intranet. The edge network delivers content to the end users and receives content from content sources. Will Verizon provide better packet handling for its customers than it will for content coming from the internet?

Internet Protocols are developed and managed by the IETF.  It seems to me that government internet regulators should be ensuring that ISPs are following the internet protocols fairly, especially on the backbone portions of the internet. And I think the backbone portion should be regulated as common carriers.  The edge networks I reserve judgement on.