Housing, civil rights groups ask Congress for $25B

A large partnership of housing and civil rights organizations reached out on Monday to congressional leaders advocating for further relief for homeowners in the next COVID-19 stimulus package.  

The letter was signed by representatives of more than 350 housing and civil rights organizations, including American Bankers Association, Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders and the Housing Policy Council, the NAACP, National Urban League, National Fair Housing Alliance and National Consumer Law Center.

The letter calls for $25 billion in direct assistance to homeowners facing hardships as a result of the COVID-19 pandemic, at least $100 million for housing counseling, and just under $40 million for the Fair Housing Initiatives Program.

Of the approximately 3.8 million homeowners past due on their mortgages, over half of them are persons of color, according to Census Bureau.

Recent homebuyers that relied on low- or no-down payment loans from FHA, VA or the Rural Housing Service are at particular risk, the group contends, noting that even six months of forbearance can put borrowers underwater on their mortgages, owing more than their home is worth.


Honest Conversations — a podcast on minority homeownership

Join HousingWire this February as we aim to provide listeners with a greater perspective on how race, housing and wealth intersect, and what experts are doing to close the homeownership gap. Tune into HousingWire Daily every Wednesday to listen to our new miniseries, Honest Conversations, a show that will examine the state of minority homeownership.


“Moreover, these borrowers are predominantly Black and Latinx families, first-time buyers and low to moderate-income families,” the letter says. “Mortgage payments assistance will be critically important to the nearly 3 million borrowers that remain in long-term forbearance plans from their mortgage servicers. We cannot begin to tackle the racial homeownership and wealth gaps if we do not take steps to prevent a wave of COVID-induced foreclosures and loss of home equity.”

The group is hoping the bulk of the requested $25 billion comes through the recently reintroduced Homeowner Assistance Fund, which can be used by state housing finance agencies. In the letter to Congress, the group states that the HAF can help homeowners by providing direct assistance with mortgage payments and get into affordable loan modifications, while assisting with utility payments, property tax and insurance payments, homeowner association dues and other support to prevent the loss of home equity.

The outreach from housing and civil rights groups comes at a pivotal time for the American housing industry. Recently appointed Treasury Secretary Janet Yellen has said she will play a key role in pushing the Biden administration’s economic agenda on Capitol Hill – which includes aggressive aid distribution in order to avoid an even longer recession.

President Joe Biden has repeatedly said his administration is focused on providing aid for those in need of affordable housing, and his $1.9 trillion American Rescue Plan was recently voted into the budget reconciliation process in order to speed up passage. The plan calls for an additional $30 billion in funding for emergency rental, energy and water assistance for hard-hit households, plus $5 billion in emergency assistance to people experiencing or at risk of homelessness.

All of this at a time in the country where Black homeownership has declined year-over-year, according to a recent Census Bureau report, and the percentage of Americans experiencing housing insecurity has risen to 9.5% – up from 7.2% in late 2020.

“A critical lesson of the Great Recession is that the communities most impacted need targeted, early intervention,” the group wrote in the letter. “Acting now to include these key provisions in the pending COVID-19 relief package will help stem what could be a damaging housing crisis in the U.S. concentrated in low income communities and communities of color.”

Source: housingwire.com

15 Top Income-Earning Blogs: Make Money Online Blogging [Infographic]

Top Paid Bloggers

Top Paid Bloggers

Table of Contents

biggest reason why you should start a blogyet?

I hope this list of income-earning blogs inspires you and proves you can make money online through blogging.

15.  Making Sense of Cents

Founder – Michelle Schroeder-Gardner
Income – $146,498 per month.

MichelleSchroederGardner #15 top earning blogs

MichelleSchroederGardner #15 top earning blogsMichelle Schroeder-Gardner started Making Sense of Cents to “help improve my finances, keep track of my progress and to help readers improve their finances along the way.”

Well, let’s see — how has Schroeder-Gardner done in these areas?

She’s certainly improved her finances, paying off over $38,000 in student loan debt in just 7 months while growing the site’s revenue year-over-year.

Schroeder-Gardner has transparently tracked her progress in her popular monthly income reports.  She says the reports act as a journal for her and keeps her accountable, while also showing others that side income is possible.

And she’s also helping others with their finances by publishing thousands of how-to articles about earning more, saving more, and becoming financially fit.
Making Sense of Cents’ primary income comes from affiliate marketing.  You can see a complete breakdown of this profitable blog’s earnings here.

#14.  Smart Passive Income

Founder – Pat Flynn
Income – $152,276 per month.

Pat Flynn #14 top earning blogs

Pat Flynn #14 top earning blogsSmart Passive Income (SPI) founder Pat Flynn is a beacon of light in the sometimes dark and shady internet marketing space.

Calling himself a “crash test dummy of online business,” Flynn transparently shows what’s working and what isn’t working in his business.

His site details his online business experiments and gives readers actionable blueprints to follow and outlines mistakes to avoid.

Flynn didn’t invent the online income report, but he certainly popularized them.  He’s been publishing monthly income reports on the blog since 2008, detailing his income sources, revenue figures, as well as his expenses.  It’s still one of the most trafficked pages on the site.

Flynn is a great example of a blogger who has successfully branched out into other areas as well.

In 2010, Flynn launched the Smart Passive Income Podcast which is routinely in iTunes top 10 Business podcasts.  To date, the show has been downloaded an impressive 33 million times.

He also broadcasts Ask Pat, a Q and A online business podcast, and SPI TV for visual learners.

Flynn is now a Wall Street Journal best-selling author with 2016’s release of Will It Fly?.

And while his individual success has been plentiful and hard-earned, Flynn gives back by serving on the board of the non-profit Pencils of Promise, helping to build new schools for children in underprivileged regions around the world.
SPI’s primary income comes from affiliate marketing, with other earnings from podcast sponsorship and products.

#13.  Lifehacker

Founder – Gina Trapani
Income – $154,000 per month

Lifehacker Gina Trapani top paid blogger

Lifehacker Gina Trapani top paid bloggerLifehacker was founded in 2005 by Gina Trapani as part of the Gawker Media network.

From the start, Trapani acted as the sole contributor, writing 8 articles a day.  Talk about blogging like a boss!

She impressively launched the site with an exclusive sponsorship from Sony, rumored to be 3 months for $75,000.  Yeah, she’s a boss.

Lifehacker eventually added other contributors and the blog continued to grow in popularity.

As its motto claims, the site’s content is about “tips, tricks and downloads for getting things done.”

Trapani moved on from the company in 2009, and Nick Denton has run it ever since.

The site still churns out 18 articles a day, all designed to make you more productive.
Lifehacker earns its most of its revenue from advertising and it’s been one of the top-earning blogs since it’s inception.

#12.  Timothy Sykes

Founder – Timothy Sykes
Income – $165,000 per monthTimothy Sykes profitable blog

Timothy Sykes profitable blog

Timothy Sykes is a multimillionaire stock trader who famously earned $4 million while day trading in college.

As a high school student, Sykes took $12,415 of his bar mitzvah gift money and turned it into  $1.65 million by day trading penny stocks.

Not stopping there, Sykes has created a hedge fund and starred in the television program Wall Street Warriors.
These days, Sykes documents his trades and strategy on his popular blog, TimothySykes.com.  His top-earning blog offers a Millionaire Challenge and a successful subscription service where users can get real-time trading alerts and access a vast library of trading videos.

#11.  Tuts+

Founder – Collis Ta’eed, Cyan Ta’eed and Jun Rung
Income – $175,000 per month

2 Top Paid Bloggers2 Top Paid Bloggers
Cyan Ta’eed and Collis Ta’eed

Collis Ta’eed, Cyan Ta’eed and Jun Rung founded Tut+ as a modest blog with tutorials on freelancing and Photoshop.

The site ultimately grew into a network of 15 educational blogs, helping people learn profitable online skills, from coding to videography.

At the center of it all remains Tuts+.  In 2014, the group combined all 16 blogs into one central hub called Envato Tuts+.

Envato Tuts+ Premium, a subscription-based membership area offering video courses and ebooks, is the primary source of the site’s income.
You can still find plenty of free content to learn creative skills and yes, they still have tutorials on freelancing and Photoshop.

Tuts+ is one of my favorite blogs and it’s inspiring to know it started as a hobby and developed naturally and organically into one of the highest-earning blogs online.

#10.  Smashing Magazine

Founder – Sven Lennartz and Vitaly Friedman
Income – $215,000 per month

Vitaly Friedman Top Earning BlogsVitaly Friedman Top Earning Blogs
Vitaly Friedman

Smashing Magazine is the superb creation of Sven Lennartz and Vitaly Friedman.

The blog debuted in 2006 with the goal of helping people with web design and web development interests.

Today, Smashing Magazine is a go-to site for anyone looking to acquire these lucrative skills, with an enormous amount of informative and actionable content.

Not surprisingly, the blog receives 5 million page views a month.

The site now hosts frequent web development conferences and full-day workshops all over the world, to help both professionals and amateurs improve their craft.

This top earning blog’s main income comes from their membership area, where users can learn from an impressive number of tutorials covering everything from coding, web design, mobile app development, UX design, graphics and WordPress.

#9.  EOFire

Founder – John Lee Dumas
Income – $223,000 per month

EOFire top earning blog

EOFire top earning blogI’m convinced John Lee Dumas never sleeps.

He operates EOFire.com, short for Entrepreneurs on Fire, delivers a daily business podcast, and in recent years has published two best-selling journals — The Freedom Journal and The Mastery Journal.

But his bread and butter is the EOFire podcast, which is fantastic. In 2012, he noticed none of his favorite podcasts were podcasting daily, leaving him wanting more. So he launched his daily podcast interviewing entrepreneurs, and the rest, as they say, is history.

JLD, as he’s affectionately known, has now interviewed over 1600 entrepreneurs, including Tim Ferriss, Barbara Corcoran, Seth Godin and Gary Vaynerchuk.

In 2013, EOFire was named Best of iTunes.

His journals wrote the book (no pun intended) on how to run a successful crowdsourcing campaign.  And through a partnership with Pencils of Promise, Dumas is parlaying the success of his journals into the creation of schools in underprivileged countries.  You can see one of the schools Dumas made possible here.
EOFire earned a gross income of $595,936 in February of 2016. That’s an incredible feat for one month and well-deserved for JLD.

It’s always good to see good people doing good work and succeeding.

#8.  Gizmodo

Founder – Peter Rojas
Income – $325,000 per month

Peter Rojas is so awesome he’s on this list twice.Peter Rojas 2 top earning blogs

Peter Rojas 2 top earning blogs

Rojas created Gizmodo to cover technology, entertainment, politics, science and science fiction.

Gizmodo launched in 2002 as part of the Gawker Media network run by Nick Denton with Rojas as Editor in Chief.  The blog quickly grew in popularity by partnering with a variety of international firms to deliver translated versions of its content in Europe.

When you visit the site’s home page, one of the first things you notice is an above-the-fold banner that is larger than most.   As you scroll down, you’ll find Gizmodo does a great job of showing a lot of content with only a couple of display ads along the side, with one of them being the same advertiser found at the top of the page.  When you finally scroll past all the content (there’s a lot!) and reach the bottom of the page, you’ll find another large banner just above the footer, and yes, the advertiser is the same as in the other two spots.
Gizmodo’s home page has a great balance of being heavily content-focused but still being able to make a tidy profit with ads.   The ads are unobtrusive but still get noticed, and because of the repetition, the advertiser gets noticed too.  It’s a win-win advertising model for other sites to emulate.

#7.  Perez Hilton

Founder – Perez Hilton
Income – $575,000 per month

Perez Hilton runs a profitable blog

Perez Hilton runs a profitable blogPerez Hilton is a great example of a successful blogger who capitalized on other opportunities outside of blogging.  He’s also a television personality, nationally syndicated host of Radio Perez, and author of a children’s book.

But what he’s most famous for is his celebrity gossip blog PerezHilton.com.  Millions visit his site every day to revel in his brand of snarky gossip entertainment.
Hilton, born Mario Armondo Lavandeira Jr, started his blog as a hobby and decided to focus on Hollywood “because it was something I was inherently curious about, and fascinated with. And, let’s face it, celebrities — a lot of them — are crazy.”

This profitable blog earns its revenue from advertising banners on the site.

#6.  Copyblogger

Founder – Brian Clark
Income – $1,000,000 per month

With Copyblogger, Brian Clark created an audience-focused content marketing machine. Brian Clark #6 top earning blogs

Brian Clark #6 top earning blogs

In fact, Forbes recently called it “the most influential content marketing blog in the world.”

Copyblogger has been helping people write better, sell more, and get more traffic since 2006.

The site’s original tagline was “Internet Marketing For Smart People.”  In other words, they’re not selling snake oil and get rich quick schemes.

Now the tagline is “Words That Work” and boy, do they ever.  Clark and his team are outstanding at writing copy.

When I read they’re sales copy, I’m always compelled to buy. In fact, this site operates on their Genesis Framework and a StudioPress blog theme.
Based on their audience research and communication, they’ve strategically added tools and platforms to help content marketers and digital entrepreneurs grow their businesses.

#5.  Mashable

Founder – Pete Cashmore
Income – $2,000,000 per month

Pete Cashmore High Earning Boog

Pete Cashmore High Earning BoogMashable was started in 2005 by Pete Cashmore, a 19-year-old who still lived at home with his parents in Scotland.

He began by documenting the latest news about social media and emerging Internet technologies.

His work resonated with lots of folks and Mashable became an immediate success, attracting 2 million readers within the first 18 months.

Mashable has come a long way since those early days.  It’s no longer just Cashmore contributing Mashable’s content (they’re hiring!), and they are now headquartered in New York City.
Mashable is positioned to be one of the top-earning blogs online for some time.

The blog is still growing with over 45 million readers a month and the content has expanded to cover business, entertainment and lifestyle and now offers 5 international editions.

Mashable’s income primarily comes from advertisements on the site.

#4.  TechCrunch

Founder – Michael Arrington and Keith Teare
Income – $2,500,000 per month

Michael Arrington and Keith Teare started TechCrunch in 2005 to cover technology industry news.

Keith Teare topo earning blogs founderKeith Teare topo earning blogs founder
Keith Teare

The blog has grown immensely and now features big-name columnists in the startup and venture capital industries.

AOL bought TechCrunch in 2005 for a rumored $25 to $40 million..
TechCrunch earns revenue from display advertising on the blog   Specifically, they charge between $19.25 and $36.50 per CPM (Cost Per Thousand views).

According to the site, they receive 12 million visitors per month and 35 million page views per month.  With such a high CPM, you can see how this top-earning blog makes its considerable income.

#3.  Moz

Founder – Rand Fishkin and Gillian Muessig
Income – $3,300,000 per month

Rand Fishkin #3 highest earning blogsRand Fishkin #3 highest earning blogs
Rand Fishkin

Moz is the go-to place for all things SEO.  Search engine optimization pros check out Moz daily to see what’s happening in the space.

They also come to use their tools and resources to help them rank their sites and extend their visibility.

Rand Fishkin co-founded the site with Gillian Muessig, who happens to be his mother.   The two initially operated a web design shop and Rand had to learn SEO to promote the business.  He shared what he learned in SEO forums and quickly became known as an authority in the field.

Frustrated by the secretive world of SEO, they started SEOMoz in 2004 as a way to openly share the knowledge.  In fact, the Moz part of their name is a direct nod to the open-source sharing philosophy made famous by the Mozilla Foundation and Dmoz Web directory project.

These days the profitable blog and community simply go by Moz, and Fishkin jokingly refers to his title as “Wizard of Moz.”
Moz earned $42 million in 2016, primarily from its paid membership area, which offers valuable tools and services for the avid search engine marketers.

True to the name, Moz still offers numerous tools for free and even the membership area comes with a 30-day free trial.

#2.  Engadget

Founder – Peter Rojas
Income – $5,500,000 per month

We last saw Peter Rojas at #8 with Gizmodo and while that blog focuses on many topics, with Engadget, it’s all about tech.Peter Rojas runs two top earning blogs

Peter Rojas runs two top earning blogs

Rojas created Engadget to give sound advice and detailed reviews on technology and consumer electronics.  From the beginning, the site has employed numerous writers and editors to contribute to its content machine.

Engadget is now run by AOL, who acquired the blog in 2005.
The lesson here is if you ever want to sell your blog, it’s best if it is a brand on its own and not a personal brand.

The company earns massive revenue from advertising on the site.

#1.  HuffPost

Founder – Arianna Huffington
Income – $14,000,000 per month

Arianna Huffington is a top paid blogger

Arianna Huffington is a top paid bloggerIn 2005, Arianna Huffington launched the Huffington Post with the goal of becoming a political counterpart to the popular Drudge Report.  The blog provided a liberal view of politics and lifestyle and quickly gained a strong following.

The site has grown year after year and in 2011, Huffington sold the blog to AOL for $315,000.

Huffington received $21 million-plus stock options in the company as part of the sale and stayed on as Editor-in-Chief.  She resigned from that post in August 2016, and now devotes her time to a new startup Thrive Global, a health and wellness site.

The site has rebranded and is now known simply as HuffPost.

It is the #1 most popular political blog according to a study by eBizMBA.  Alexa Global, Compete and Quantcast.

The top-earning blog is an enormous success, earning $14,000,000 in revenue in 2016, and it is estimated to be worth $1 billion currently.

Sponsored advertising revenue provides the majority of HuffPost’s income.  The site provides banners and other ads across it’s variety of channels.

What do you think?

I hope this list shows you what is possible and inspires you to follow your own path to the top.

As always I would love to hear your thoughts.  Please leave a comment and let me know what you think

15 Top Earning Blogs Making Money Online Infographic

As always I would love to hear your thoughts.  Please leave a comment and let me know what you think

Most profitable blogsMost profitable blogs
Top Paid Bloggers

As always I would love to hear your thoughts.  Please leave a comment below.  What did you think?

<!– –>

Source: incomist.com

13 Bizarre Job Interview Questions — and How to Answer Them

fizkes / Shutterstock.com

Just the thought of a job interview can make even the most confident prospective employee nervous. So much is riding on how you answer seemingly random questions asked by people you may never have met before.

Will they dig into the technical aspects of the job, making you wish for a calculator and a cheat sheet? Do they prefer those old cliche questions such as “What’s your biggest weakness?” Or do your interviewers subscribe to the wacky logic school of questions, like “Explain why manholes are round”?

You can’t buy an SAT prep book to prepare for a job interview, but here are some of the toughest job interview questions around, with tips on how to answer them gracefully, without breaking into a chorus of “Take This Job and Shove It.”

1. How weird are you?

Nagy-Bagoly Arpad / Shutterstock.com

Online shoe and clothing retailer Zappos is known for posing some real stumpers to job candidates. The late Tony Hsieh, who was CEO of the firm, reportedly liked asking job candidates: “On a scale of one to 10, how weird are you?”

Tips: This is one of those no-right-answer questions. Interviewers are likely looking to see if you can think on your feet and produce a decent response off the top of your head. They also want to know how you’d fit into their culture. One of Zappos’ core values is: “Create Fun & a Little Weirdness.”

2. Sell me this pencil

Bella Logachova / Shutterstock.com

Job site Monster.com singles out “Sell me this pencil” as a job-interview challenge sometimes faced by those seeking sales jobs. It kind of makes sense — we’ve all met natural salespeople, and turning on that kind of charm in an interview can reveal whether you’re one of them.

Tips: Your interviewer is looking for confidence, so avoid stammering or trailing off when searching for uses for the writing instrument. The best salespeople know to ask a prospective buyer plenty of questions first, to determine if he or she needs the product they’re hawking.

3. Why are manhole covers round?

terekhov igor / Shutterstock.com

It’s a cliche interview question, but that doesn’t mean an interviewer won’t throw it at you: “Why are manhole covers round?”

While not all employers use this kind of question, you don’t want to be unprepared if they do.

Tips: The most common answer is that the cover won’t fall into the hole, but if you can defend a different answer, go with it. It may be as simple as redefining the question — pointing out that manhole covers need to fit a manhole, and in this country, at least, manholes are generally round.

4. What are you most passionate about?

Vasyl Shulga / Shutterstock.com

Another question is to ask candidates to explain what they are most passionate about. It’s a cliche, but it’s widely used, so be prepared.

Tips: Your answer doesn’t need to be related to your career field. If you brew beer at home, explain how that’s done. If you raise pugs or play fantasy football or know all the best tricks for collecting frequent-flyer miles, that could be your response. Your interviewer probably wants to see how well you explain yourself, how you think about process and how you deal with ambiguity — all vital skills in the workplace.

5. The cup of water challenge

Pakasit Chuaysri / Shutterstock.com

This one’s not a question but a hidden challenge. An interviewer might brings you a disposable cup of water to drink. It looks like a simple act of hospitality, but you may be under observation to see if you clean up after yourself and dispose of the cup when done.

Tips: Just as those signs in office break rooms say, your mother doesn’t work here. (And even if she did, it’s not her job.) Remember the cup example as a way of reminding yourself that sly interviewers may be watching everything you do, even if it doesn’t seem directly related to the position you are applying for.

6. Why shouldn’t I hire you?

Employer looking at resume
fizkes / Shutterstock.com

You’re sitting there telling the employer all about why he or she should hire you — and you’re hit with the opposite question: Some managers ask why they shouldn’t hire you. Ugh, nice curveball. Be ready to swing away.

Tips: A similar question some interviewers like to ask is, “What would your enemy say about you?” Think about the position you want. If you’re never going to have to make sales calls, it won’t hurt to admit that you aren’t a cold-calling salesperson at heart. But salespeople also come with a natural enthusiasm about their product or business, so be careful to find a way to show you have that.

7. Where should we eat?

frantic00 / Shutterstock.com

Mike O’Neill, the CEO of music-rights company BMI, has asked job candidates to choose the restaurant where their interview will be held. He wants to see if they’re trying to impress or please the possible future boss, or if they’re honestly choosing a place they like.

Tips: O’Neill likes honesty to be on the menu as part of his restaurant test. He notes that he loves it when candidates confess that choosing the restaurant made them nervous — there’s nothing like candor, even if it makes the candidate look less than perfect. We’d steer clear of either end of the budget spectrum — neither fast-food nor four-star dining. Go for something eclectic, yet reliable — like you!

8. Are you smart, or do you work hard?

Billion Photos / Shutterstock.com

Another tried and true interview question is this: Which would you say is more true of you, that you are smart or that you work hard?

We’re thinking most candidates want to say they’re both, but imagine you have to choose.

Tips: Some bosses believe that hard work, showing up, diligence and consistency matter more than brains. Whatever you say, don’t explain that your intelligence means you don’t have to work hard. Humility matters a great deal in the workplace.

9. Where does your boss think you are right now?

Dmytro Zinkevych / Shutterstock.com

Making time for a job interview when you’re still employed can be tough. It suddenly can get a lot tougher if your interviewer asks where your current boss thinks you are right at that moment. Uh, busted?

Tips: The interviewer probably wants to know how you treat your current boss as a sign of how you will treat your boss at a new company. Be honest but tactful. Sure, you may not have specified to your current boss that you were going on an interview, but make it clear that you are not taking time you’re not entitled to and that, of course, you’ll finish whatever work needed to be done while you were out.

10. How many golf balls can fit in a school bus?

CHIARI VFX / Shutterstock.com

Some interviewers relish the bizarre logic of questions like “How many tennis balls can you fit into a limousine?” Or “How many golf balls can fit into a school bus?”

Tips: You don’t need to get the answer right — no one knows the answer anyway. What interviewers want here is to see how you walk them through the method you use to attempt a solution, says job search site The Muse. Talk through the size of the bus and the size of the golf balls, and make sure you think of oddball elements of the problem, like the space needed for the bus seats. Even a nongolfer can take a swing at this one.

11. Would you rather fight 1 horse-sized duck or 100 duck-sized horses?

Gerisima / Shutterstock.com

This is another of those inane questions meant not to elicit a precise answer but to see how you think on your feet: Would you rather fight one horse-sized duck or 100 duck-sized horses?

Tips: Don’t quack up, you can get this. It’s likely that the interviewer wants to know if you can stay poised under pressure and how you will break down a problem to solve it. Like the golf balls in the school bus question, there’s no right answer. And unlike that one, this requires less knowledge of sizes and spatial awareness and relies more on creativity. Think about the pros and cons of each battle, and then go ahead and wing it.

12. How have you solved tough problems?

vasilis asvestas / Shutterstock.com

Elon Musk, the founder and CEO of electric motor company Tesla, CEO of SpaceX and the world’s richest person, has said that he asks job candidates this: “Tell me about some of the most difficult problems you worked on and how you solved them.” While he may want to hear the answer, it is another tricky interview question.

Tips: The question may not be bizarre, but Musk’s motive is unusual. CNBC explains that he asks it to screen for liars. “The people who really solved the problem know exactly how they solved it,” Musk said. “They know and can describe the little details.”

13. Which state would you get rid of?

crazystocker / Shutterstock.com

Another well-used job interview question you might encounter is this: “If you were to get rid of one U.S. state, which one would it be, and why?”

It’s reminiscent of a bit on “The Simpsons,” when Grandpa writes to the president of the United States to lobby for eliminating three states. “There are too many states nowadays, he grumbles, adding, “P.S.: I am not a crackpot.”

Tips: This is another zany question that tests how your thought process works. Be aware: It may also reveal plenty about you and your values. Maybe you would start with Alaska or Hawaii for practical distance reasons. You might think outside the box and suggest combining two similar states, say, North and South Dakota, into one. Really, any thoughtful answer should be fine, but don’t bring politics or some weird personal grudge against, say, Rhode Island, into the picture.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Effective tax rates in the United States

I messed up! Despite trying to make this article as fact-based as possible, I botched it. I’ve made corrections but if you read the comments, early responses may be confusing in light of my changes.

For the most part, the world of personal finance is calm and collected. There’s not a lot of bickering. Writers (and readers) agree on most concepts and most solutions. And when we do disagree, it’s generally because we’re coming from different places.

Take getting out of debt, for instance. This is one of those topics where people do disagree — but they disagree politely.

Hardcore numbers nerds insist that if you’re in debt, you ought to repay high-interest obligations first. The math says this is the smartest path. Other folks, including me, argue that other approaches are valid. You might pay off debts with emotional baggage first. And many people would benefit from repaying debt from smallest balance to highest balance — the Dave Ramsey approach — rather than focusing on interest rates.

That said, some money topics can be very, very contentious.

Any time I write about money and relationships (especially divorce), I know the debate will get lively. Should you rent a home or should you buy? That question gets people fired up too. What’s the definition of retirement? Should you give up your car and find another way to get around?

But out of all the topics I’ve ever covered at Get Rich Slowly, perhaps the most incendiary has been taxes. People have a lot of deeply-held beliefs about taxes, and they don’t appreciate when they read info that contradicts these beliefs. Chaos ensues.

Tax Facts

When I do write about taxes — which isn’t often — I try to stick to facts and steer clear of opinions. Examples:

  • The U.S. tax burden is relatively low when compared to other countries.
  • The U.S. tax burden is relatively low when compared to U.S. tax burdens in the past.
  • Overall, the U.S. has a progressive tax system. People who earn more pay more. That said, certain taxes are regressive (meaning that, as a percentage of income, low earners pay more).
  • A large number of Americans (roughly one-third) pay no federal income tax at all.
  • Despite fiery rhetoric, no one political party is better with taxing and spending than the other. The only period during the past fifty years in which the U.S. government had a budget surplus was 1998-2001 under President Bill Clinton and a Republican-controlled Congress.

Even when I state these facts, there are people who disagree with me. They don’t agree that these are facts. Or they don’t agree these facts are relevant.

Also, I sometimes read complaints that the wealthy are taxed too much. To make their argument, writers make statements like, “The top 50% of taxpayers pay 97% of all federal income taxes.” While this statement is true, I don’t feel like it’s a true measure of where tax burdens fall.

I believe there’s a better, more accurate way to analyze tax burdens.

Effective Tax Burden

To me, what matters more than nominal tax dollars paid is each individual’s effective tax burden.

Your effective tax burden is usually defined as your total tax paid as a percentage of your income. If you take every tax dollar you pay — federal income tax, state income tax, property tax, sales tax, and so on — then divide this total by how much you’ve earned, what is that percentage?

This morning, while curating links for Apex Money — my second personal-finance site, which is devoted to sharing top money stories from around the web — I found an interesting infographic from Visual Capitalist. (VC is a great site, by the way. Love it.) They’ve created a graphic that visualizes effective tax rates by state.

Here’s a summary graph (not the main visualization):

State effective tax rates

As you can see, on average the top 1% of income earners in the U.S. have a state effective tax rate of 7.4%. The middle 60% of U.S. workers have a state effective tax rate of around 10%. And the bottom 20% of income earners (which Visual Capitalist incorrectly labels “poorest Americans” — wealth and income are not the same thing) have a state effective tax rate of 11.4%.

Tangent: This conflation of wealth with income continues to grate on my nerves. I’ll grant that there’s probably a correlation between the two, but they are not the same thing. For the past few years, I’ve had a low income. I’m in the bottom 20% of income earners. But I am not poor. I have a net worth of $1.5 million. And I know plenty of people — hey, brother! — with high incomes and low net worths.

It’s important to note — and this caused me confusion, which meant I had to revise this article — that the Visual Capital numbers are for state and local taxes only. They don’t include federal income taxes. (Coincidentally, I made a similar mistake a decade ago when writing about marginal tax rates. I had to make corrections to that article too. Sigh.)

GRS readers quickly helped me remedy my mistake, pointing to the nonprofit Tax Foundation’s summary of federal income tax data. With a bit of detective work, I uncovered this graph of federal effective tax rates by income from the Peter G. Peterson Foundation. (Come on. What parent names their kid Peter Peterson? That’s mean.)

Federal effective tax rates

Let’s put this all together! According to the Institute on Taxation on Economic Policy, this graph represents total effective tax rates for folks of various income levels. Note that this graph is explicitly comparing projected numbers in 2018 for a) the existing tax laws (in blue) and b) the previous tax laws (in grey).

TOTAL effective tax rates in the U.S

Total Tax Burden vs. Total Income

Here’s one final graph, also from the Institute on Taxation and Economic Policy. This is the graph that I personally find the most interesting. It compares the share of total taxes paid by each income group to their share of the country’s total income.

Tax burden vs. total income

Collectively, the bottom 20% of income earners in the United States earned 3.5% of total income. They paid 1.9% of the total tax bill. The top 1% of income earners in the U.S. earned one-fifth of the nation’s total personal income. They paid 22.9% of total taxes.

Is the U.S. tax system fair? Should people with high incomes pay more? Do they pay more than their fair share? Should low-income workers pay more? Are we talking about numbers that are so close together that it doesn’t matter? I don’t know and, truthfully, I don’t care. I’m concerned with personal finance not politics. But I do care about facts. And civility.

The problem with discussions about taxation is that people talk about different things. When some folks argue, they’re talking about marginal tax rates. Others are talking about effective tax rates. Still others are talking about actual, nominal numbers. When some people talk about wealth, they mean income. Others — correctly — mean net worth. It’s all very confusing, even to smart people who mean well.

[embedded content]

Final Note

Under the Digital Accountability and Transparency Act of 2014, the U.S. Department of the Treasury was required to establish a website — USASpending.gov — to provide the American public with info on how the federal government spends its money. While the usability of the site could use some work, it does provide a lot of information, and I’m sure it’ll become one of my go-to tools when writing about taxes. (I intend to update a couple of my older articles this year.)

U.S. federal budget

The USA Spending site has a Data Lab that’s currently in public beta-testing. This subsite provides even more ways to explore how the government spends your money. (I also found another simple budget-visualization tool from Brad Flyon at Learn Forever Learn.)

Okay, that’s all I have for today. Let the bickering begin!

Source: getrichslowly.org