How Many Pages Long Is the U.S. Income Tax Code in 2013?

To contact us Click HERE

According to the CCH Standard Federal Tax Reporter, as of 2013, it now takes 73,954 regular 8-1/2" x 11" sheets of paper to explain the complexity of the U.S. federal tax code!

Believe it or not, that represents an improvement from the trend that has existed since the end of World War 2, where the tool we developed to project the number of pages needed to explain the U.S. income tax code had anticipated that 77,030 pages would be needed in 2013.

You might think that our tool being "off" by 3,076 pages might depress us, especially after our tool was just 1.3% (or 956 pages) off from 2012's total of 73,608 pages. But it's really a cause for celebration, especially when you consider the real reason why the U.S. tax code isn't growing as much as our tool would project: it's an ongoing benefit of having perhaps the laziest U.S. Senate ever in U.S. history, while the more functional U.S. House of Representatives is controlled by the opposing political party!

So if the U.S. income tax code only grows by 346 pages instead of the 3,076 that the post-World War 2 trend would have predicted, count your blessings that you live in a country where having different political parties in control of different branches of the government results in the kind of non-productivity that can prevent truly bad things from happening.

Teens, Young Adults and President Obama's Minimum Wage

To contact us Click HERE

What effect might President Obama's 2013 State of the Union address proposal to increase the U.S. federal minimum wage from $7.25 per hour to $9.00 per hour have upon teens and young adults?

That question is especially relevant because teens and young adults between Age 15 and 24 represent approximately half of all minimum wage earners in the United States, not to mention making up a disproportionate share of individuals who earn wages just above that level.

To find out, we tapped the U.S. Census Bureau's detailed income data for the Age 15-24 population that it collected in 1995, when the U.S. federal minimum wage was $4.25 per hour, so we can see what effect raising the minimum wage to today's $7.25 per hour had on this age group through the data the Census Bureau collected in 2012 [1].

Our first chart adds up all the income earned by individuals between the ages of 15 and 24 in the United States in both 1994 and 2011 [2], both in originally reported values and in terms of constant 2011 U.S. dollars:

This result is pretty remarkable. In nominal terms, the aggregate income earned by all 15-24 year olds in 1994 adds up to more than $236.8 billion, while the aggregate income of those Age 15-24 in 2011 adds up to over $358.8 billion. But when we adjust for the effect of inflation, we see that the total amount of money paid out to 15-24 year olds in each year is almost identical!

In a sense, it is almost as if the employers of U.S. teens only have a fixed amount of revenue that they can use to pay them.

Next, we determined what the minimum wage for 1994, 2011 and the President Obama's proposed minimum wage in 2013 would be in terms of constant 2011 U.S. dollars:

Here, we find that although the U.S. federal minimum wage has grown by 70.6% from 1994's $4.25 per hour to 2011's $7.25 per hour, in inflation-adjusted dollars, it has really only increased by 12.4%, from $6.45 constant 2011 U.S. dollars in 1994 to $7.25 per hour today.

Meanwhile, President Obama's proposed increase to $9.00 per hour would represent a raw increase of 24.1%, which works out to be a 21.7% increase (to $8.82 in constant 2011 U.S. dollars) after we adjust for inflation.

In our next chart, we answer a hypothetical question by dividing the aggregate income of all 15-24 year olds in the U.S. by dividing it by the minimum wage for each year: how many equivalent hours of work would it take to earn all the aggregate income earned by all individuals Age 15-24 in each year if it was all earned at the federal minimum wage that applied in each year?

This is where that remarkable result we illustrated earlier comes into play. Because the employers of 15 to 24 year old Americans don't have any more money available in real terms to pay their workers than they did in 1994, an increase in the minimum wage forces a reduction in the number of hours in which those Age 15-24 can be employed below their 1994 level.

In the chart above, we see that the 12.4% real increase in the minimum wage from 1994 to 2011 results in an 11.2% reduction in the number of hours that U.S. employers had available for teens and young adults to work. If President Obama's 21.7% real increase in the minimum wage were to go into effect today, the fixed amount of money that the employers of teens and young adults have available would reduce the number of equivalent minimum wage hours by 17.8% below the 2011 figure.

We should also note that the number of hours shown for each year in our chart above would represent the hypothetical maximum number of hours that U.S. employers would have available for all teens and young adults to work. Teens and young adults who earn more than the minimum wage would reduce the amount of money and hours available for those who earn less than they do, forcing many out of the job market altogether. The more who make more than the minimum wage, the more who will be locked out from even being able to be employed.

So how did that 12.4% real increase in the federal minimum wage play out in real life for 15-24 year olds in the United States? Our final chart shows the changes in the number of teens and young adults both with and without income in 1994 and 2011:

Here, we should first note that the population of 15-24 year olds in the United States increased by 6,823,000, from 36,294,000 in 1994 to 43,117,000 in 2011.

With that noted, we find that there are some 1,012,000 fewer teens and young adults with incomes in 2011 than there were in 1994, as the number of income earning teens and young adults fell from 27,026,000 to 26,014,000. Meanwhile, the number of teens and young adults without incomes skyrocketed by 7,835,000, rising from 9,268,000 in 1994 to 17,103,000 in 2011.

That 84.5% increase in the number of teens and young adults without any kind of measurable income in 2011 should not be surprising, given that over 89% of teens and young adults who do have incomes earned more than the federal minimum wage in this year - that high figure means that most of the impact will be felt by teens who are blocked by the minimum wage from entering the job market. In this case, that includes the entire increase in the teen population from 1994 to 2011. Remember our point about the "more who make more" than the minimum wage above!

In the absence of real economic growth boosting the revenues for the employers of teens and young adults, which would be what is needed to effectively counteract this effect, we can expect the same scenario to play out if President Obama's proposed minimum wage ever goes into effect.

In an upcoming post, we'll take on how much of a deadweight loss that would be imposed on the economy for just Age 15-24 year olds by implementing President Obama's poorly considered proposal. In the meantime, see the comments here for more insight on the outcomes that this proposal would really achieve.

Notes

[1] We selected 1995 because the U.S. Census Bureau only makes detailed income data for that year easily available in a digital-friendly format). We selected 2012 because it is the most recent year.

[2] The U.S. Census Bureau collects in March of each year, so its reported income figures really apply for the previous year, which is why we've indicated 1994 and 2011 in our charts.

[3] We've deliberately introduced a flaw in our analysis above (not the math, mind you!), so it conforms with how President Obama and many of his supporters see the world - we think that they should really have to explain why they are out to hurt teens and young adults so much if what they believe about income inequality is really true.

References

U.S. Census Bureau. Current Population Reports. Consumer Income. Series P60-189. Table: PINC-01. Selected Characteristics of Persons 15 Years and Over,By Total Money Income in 1994, Work Experience in 1994 and Sex (Numbers in thousands). September 1995.

U.S. Census Bureau. Current Population Survey. 2012 Annual Social and Economic Supplement. Table: PINC-01.Selected Characteristics of People 15 Years Old and Over, by Total Money Income in 2011, Work Experience in 2011, Race, Hispanic Origin, and Sex, Total Work Experience, Both Sexes, All Races. [Excel Spreadsheet]. September 2012.

Sahr, Robert. Inflation Conversion Factors for Years 1774 to Estimated 2022. [PDF Document].

Quarterly Data for the S&P 500, Since 1871

To contact us Click HERE

Did you know that there isn't anywhere on the web where you can go and get quarterly data for the S&P 500 before 1988? It's true, or at least it was true, until today!

Prior to today, the only place you could obtain data like the amount of dividends per share (DPS) or earnings per share (EPS) for S&P 500 companies was Standard & Poor, who only makes available the data since 1988 [Excel spreadsheet].

Meanwhile, you can obtain trailing year DPS and EPS data for the S&P 500 and its predecessor indices and component stocks from Yale's Robert Shiller [Excel spreadsheet], or perhaps more easily from our S&P 500 at Your Fingertips tool, which go all the way back to January 1871. Unlike Professor Shiller's spreadsheet, our tool also calculates the rate of return between any two calendar months you select, both with and without the reinvestment of dividends and with and without the effects of inflation.

It's a strange omission, if you think about it, because earnings and dividends are both reported and paid by the quarter!

So we're fixing that situation today. We've used S&P's available quarterly data since 1988 and our trailing year data to work out what the S&P 500's quarterly data would have to be for each quarter going all the way back to 1871-Q1.

You can access our data in the tool below, or if you prefer your data in graphical format, in the charts that appear below our tool:

Year and Quarter for S&P 500 Data
Input Data	Year	Quarter
Select Year and Quarter	1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012	1 2 3 4

Historic Quarterly Stock Market Data
Estimated Results	Values
Average Price per Share in Month Ending Quarter
Quarterly Dividends per Share
Quarterly Earnings per Share

Now for the charts covering the quarterly data for the S&P 500 and its predecessor indices and component stocks since the first quarter of 1871. Our first chart shows the S&P 500's average price per share in the month ending the quarter in question:

Next, let's look at the dividends per share that were paid out in each quarter from 1871-Q1 through 2012-Q4:

Our third chart reveals the earnings per share that would be reported for each quarter from 1871-Q1 through 2012-Q4:

If you're ever bored and looking for something to do, overlay the data for the price per share chart and the dividends per share chart - you might make a pretty unique discovery!

Update 16 February 2013: Speaking of which, it certainly would be a lot easier to make that discovery if we also made the Quarterly S&P 500 Data Since 1871-Q1 available to you in spreadsheet form!

Image Source: Northern California Grantmakers

LANGUAGE="JavaScript">

The Rejection of America's Volunteer Military

To contact us Click HERE

Today, we're revisiting the topic of the ages of those who served in the U.S. armed forces during World War 2, because we have new information to add to it!

Before we go any further, the reason we're doing this is because this information plays a key part in one of the projects we're developing behind the scenes here at Political Calculations, which we'll be presenting in bits and seemingly unrelated pieces throughout this year.

So what information are we adding today? Well, it's about the end of volunteerism and the institutionalization of mandatory conscription for filling the ranks of the U.S. Army, Army Air Corps, Navy and Marines during the Second World War.

Air Force Magazine's John T. Correll explains more about how the American tradition of volunteering for military service came to be rejected by the executive order of President Franklin D. Roosevelt:

In 1936, an obscure Army major, Lewis B. Hershey, was appointed the executive officer of the Joint Army-Navy Selective Service Committee, set up to prepare for possible mobilization. The panel consisted of two officers and two clerks. Hershey was a former schoolteacher who joined the National Guard in 1911 and transferred to the regular Army after World War I. Nobody, least of all Hershey, dreamed the job would last for decades....

When Germany in 1940 invaded the Low Countries and France, Congress authorized the first peacetime draft in American history. Inductions began in November 1940. The following year, Hershey was promoted to brigadier general and named director of the Selective Service.

A total of 10.1 million men were drafted during World War II. At the beginning of the war, men rushed to enlist, but, from Hershey’s perspective, that ruined orderly conscription. He persuaded President Roosevelt in December 1942 to end voluntary enlistments except for men under 18 and over 38.

Prior to President Roosevelt issuing Executive Order 9279 on 5 December 1942, American men between the ages of 21 and 36 were subject to the military draft. In his executive order, in addition to eliminating volunteerism and fixed-term enlistments, President Roosevelt also took advantage of legislation passed by the U.S. Congress on 11 November 1942 to expand the eligible age range to be subject to the draft to include all men from the ages of 18 through 37. Volunteering for service was only permitted for those under the age of 18 and up to the age of 45 who claimed they could satisfy the military's enlistment requirements.

The birth years that coincide with these age ranges are shown in our updated chart below:

The end of volunteerism with the draft explains why the average age of those who served in World War 2 is 26 - it is the middle of the range from which the pool of those conscripted were drawn into service in the years from 5 December 1942 through the end of the war in 1945.

But more importantly, with how the draft worked during World War 2, by lottery, the age distribution of those conscripted into military service in a given year would be fairly even, rather than being heavily concentrated around a given age. The size of any bell-curve that might normally have formed was therefore minimized as a result of the policy.

That evenness of age distribution among those who served in the armed forces during World War II, in turn, explains a lot of things that turn up repeatedly in various datasets after the war. And that is something we'll be revisiting throughout the year....

A Little More Room To Run in the Near Term, And Then ???

To contact us Click HERE

Our favorite chart, updated through the futures for 25 February 2013:

Where Did the More Room to Run in the Near Term Come From?

The actions last week by Wellpoint (NYSE: WLP), Halliburton (NYSE: HAL) and Coca-Cola (NYSE: KO) to boost their dividends, which offset earlier moves in February by Diamond Offshore Drilling (NYSE: DO), Cliffs Natural Resources (NYSE: CLF), Exelon (NYSE: EXC), and CenturyLink (NYSE: CTL) to cut their dividends. The net increase in dividends expected for 2013-Q2, where investors are currently focusing their attention, provides a little more room for the rally to run, as the change in the growth rate of stock prices will continue to move upward to converge with the change in the growth rate of dividends per share expected in 2012-Q3.

By the way, it's really unusual to have more than three S&P 500 companies act to cut their dividends in a single month outside a period of recession.

What Does "After That" Mean?

Hypothetically, what would it mean if investors were to suddenly change their focus from 2013-Q2 to 2013-Q3? Or to some other more distant quarter in the future?

Well, in terms of today's stock market, that would mean shaving about 30% from today's stock prices. But then, there is no guarantee that investors will focus on 2013-Q3. They could choose to focus on 2013-Q4 which is considerably worse. Or they could opt to focus on 2014-Q1, which initially looks to be similar to 2013-Q2, but about which we'll know more in a about a month.

That, by the way, would be the best case scenario for stock prices in 2013 provided that wild card factors like a really amped up quantitative easing program by the Federal Reserve don't inject a lot of noise into the market.

The latest that investors might shift their forward-looking focus away from 2013-Q2 will be 21 June 2013, but they will become increasingly likely to shift their focus to a more distant future quarter after 15 March 2013, when the futures contracts for the S&P 500's dividends in the first quarter of 2013 expires.

Update 25 February 2013: See if you can tell what time the U.S. stock market got the news that the polls had closed in Italy without a clear outcome today, along with all that means for uncertainty in Europe's markets:

Now, that's what we would describe as a classic noise event! It's up to you to decide if that's a calamity or an opportunity!

Is your poop red?

To contact us Click HERE

Blood in your stool can be a sign of a serious disorder.  WebMD is a good resource for information.  However, your ordure being red could be a symptom of something I find disgusting, but otherwise completely harmless.

CREDIT: Frito Lay

Flamin' Hot Cheetos.  Yes, this seemingly innocuous treat is turning caca red.  

I guess looking down into the toilet and seeing bright red night soil might be frightening, frightening enough to wonder about seeking medical treatment.  There are reports that scared parents are taking children to the ER because of red turds.

Evidently, red dye #40 is not metabolized, so it is passed along with the rest of the excreta.  

Red Dye #40

Here is what I find shitty, and it doesn't have to do with crap.  Frito Lay's website provide the nutritional information for its snacks.  If you chow down on an entire 8.5 oz bag, you've consumed 1360 Calories.  If you have usually eat 2000-2500 Calorie a day, this one bag is your breakfast and lunch.  You also consumed more than two grams of salt - an entire day's worth of sodium.


DISCLAIMER:  I do love Lay's Classic potato chips.  These have a nice flavor with a good balance of fat and salt.

NOTE: I tried as hard as I could to use as many synonyms for feces.  Some I didn't use are bodily waste, droppings, pooh, poo, manure, dung, bowel movement, number two, and doo-doo. I also didn't to use any words like sheisse, merde, dreck, and govno from other languages. The reader is invited to submit their own in the comments.

The Cure for Constipation

To contact us Click HERE

Lest the reader thinks I am obsessing by having two posts in a row dealing with feces or that I have a desire to use all the available synonyms for feces, the timing of these two posts is merely a coincidence.
I came across QuantumMAN™: World's First Downloadable Medicine.  One of the products he sells is QLax™, a purported medical treatment for constipation.  His "radical new technology" is based on the concept that

The entire universe including the human body and disease that afflicts it operates according to the principles of quantum physics.

OK.  Ernest Rutherford said, "All science is either physics or stamp collecting." On those days when I am feeling terribly arrogant, I agree with Rutherford.  So where does QuantumMAN™ go from here?

Chemical based laxatives do not operate according to those principles and, as such, are not compatible with human physiology…

CREDIT: www.zazzle.com

Wait a minute.  Didn't he just claim the entire universe operates by quantum principles? Chemistry is somehow exempt?  Let's leave this puzzler for more pressing issues.

To solve a quantum problem you must offer a quantum treatment within a quantum operating system. Therefore, ZAG, the private humanitarian medical research group that employs QuantumMAN™, has developed the ideal quantum laxative branded QLax™. Derived from extreme advances in quantum computing, QLax™ consists of "Portal Access Keys™" (PAKs™) downloaded to your personal computer, smartphone or tablet. Accessing these PAKs™ allows your brain to quantumly receive (upload) QLax™'s master programs. QuantumMAN™ is the personification of this quantum data. When uploaded, QLax™ provides thousands of physiologic directives to your brain to program it to provide the corrective measures required to relieve your constipation without any possibility of adverse side effects no matter how long QLax™ is used. Due to repeater programs imbedded in its data, QLax™ allows delivery of its physiologic directives automatically several times a day for 24 hours with just one PAK™ dose. For extremely stubborn cases, more than PAK™ dose can be uploaded at a time without concern of any adverse side effects. ZAG guarantees your complete satisfaction for 30 days from date of purchase or your money is refunded.

For only $5, you can download 25 PAKs™ to your computer, smartphone, or tablet, and then your brain will upload - I mean, quantumly receive the program.  I do love the fact that if I'm still constipated after a month, I can get my $5 back.  Somehow after a month I think I might have more to worry about than the money.
Who's responsible for the amazing breakthrough in quantum medicine?

The Zürich Alpine Group (ZAG) is a private humanitarian medical research group of scientists and physicians working cooperatively and quietly around the world in the quest to improve the quality, efficacy and costs of medical care.

ZAG understands that quantum problems require a quantum solution and has found a way to transfer bioinformation from its quantum computer via quantum teleportation to the brain, also a quantum computer, to reprogram the brain to effect positive medical changes within the body and mind.

Why haven't we heard of this group and it marvelous products?

ZAG has quietly cultivated these phenomena and deliberately avoided scientific publication of its work until the intended release of its collaborative QuantumMANsite website.

ZAG has shunned reporting its research and trials in the traditional medical literature because it believes this venue is heavily influenced by Big Pharma and politics. 

They report they have conducted clinical trials in order to test their products efficacy and safety, but what is strange is that when you go to the Clinical Trials section of the website, you find no data.  All you find is audio recordings of twelve so-called participants.
What other incredible (from the Latin in- meaning 'not', and credere meaning 'believe') products are available?  If you don't know what's ailing you, there's QDr™ Tricorder Plus.  Star Trek fans take note.
Then there's QFood™, the solution to starvation.

The person will not be hungry and/or feel deprived or experience cravings if instructions are properly followed. For 10 days at a time, one set of QFood™ downloads will provide satiation and sufficient quantum nourishment that the person will thrive and not be at risk of dying due to starvation. 

There are even products for the bedroom.  Know what I mean.  Nudge nudge. Wink, wink.  Say no more.  Heaven's Gate™, QBX™, TigerTail™, HEjuvenate™, SHEjuvenate™, QHE™, and QSHE™.

CREDIT: unknown

What is it a duck, quantum or otherwise, says?