Up to 75,000 Dollars, Money Buys Some Happiness

We have all heard the saying that “money can’t buy happiness”. However according to a new study from Princeton University, low-income levels are often associated with low emotional well-being and life evaluation, while higher incomes are associated with the opposite. They did find that the effect diminished drastically past annual incomes of $75,000.

AFP reports:

The latest study adds a new element to a long-running debate among academics and others on whether money can buy happiness -- the definition of which can be elusive.

"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being," the researchers write in the Proceedings of the National Academy of Sciences.

They said the effect of income on the emotional dimension of well being "satiate fully at an annual income of around 75,000 dollars."

"More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps 75,000 dollars is a threshold beyond which further increase in income no longer improve individuals' ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure."

The research was based on an analysis of responses to 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of US residents conducted by the Gallup Organization in 2008 and 2009.

The level of 75,000 dollars was just above the median income of 71,500 dollars for US households in 2008.

Read more here

U.S. Incomes Tumbled in 2009

From the Wall Street Journal:

Personal income took a hit in most of the U.S. last year with the only gains coming from government support, according to new data from the Commerce Department.

Income declined in 223 metro areas last year, increased in 134 and was unchanged in nine regions. Even though prices declined last year — down 0.2% from a year earlier as measured by the national price index for personal consumption expenditures — incomes fell even more. On average, personal income dropped 1.8% in 2009, following a 2.7% increase in 2007.

In areas that saw gains, most of the increases came from the government in one way or another. In 77 of the 134 regions that saw incomes increase, the growth came from transfer receipts such as unemployment benefits or Social Security payments. In most of the remaining 57 metro areas, the gains were concentrated in the government sector, the Commerce Department said, including strong growth in military earnings.

Rise of the Super-Rich Hits a Sobering Wall

From the New York Times:

The rich have been getting richer for so long that the trend has come to seem almost permanent.

They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.

But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.

For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs — as well as many wealthy investors who have lost millions. As a result, economists and other analysts say, a 30-year period in which the super-rich became both wealthier and more numerous may now be ending.

The relative struggles of the rich may elicit little sympathy from less well-off families who are dealing with the effects of the worst recession in a generation. But the change does raise several broader economic questions. Among them is whether harder times for the rich will ultimately benefit the middle class and the poor, given that the huge recent increase in top incomes coincided with slow income growth for almost every other group. In blunter terms, the question is whether the better metaphor for the economy is a rising tide that can lift all boats — or a zero-sum game.

Taxes: Have You Paid Your Fair Share?

From CBS News.com:

I guess we've all paid - or avoided paying - our taxes by now and it feels good to have it over with. It didn't hurt much, did it? I made more money last year than I made the year before, but of course my taxes were higher too - the most I ever paid.

To tell you the truth, I have a feeling I paid more than my share of taxes. I guess everyone feels that way.

I have an idea how the IRS could get more money out of the tax cheaters and it wouldn't cost the government a nickel: they would make tax records open to all of us. The figures would be available to anyone who wanted to look them up. This would be a good way to get everyone to pay what they owe. I'd be willing to do it if everyone else did it.

Some people wouldn't dream of cheating anywhere else but they don't worry about cheating on their tax returns if they think they could get away with it.

I've always thought that Uncle Sam goes about trying to get us to pay our taxes the wrong way.

The IRS never appeals to us as patriotic Americans. I think what everyone pays should be public information. Americans would be happier to pay their income tax if they thought that everyone was paying what they were supposed to pay.

Maybe people would be proud of what they pay instead of hiding their income.

I don't know why our tax returns are secret, anyway. What we earn isn't usually much of a secret to anyone who knows us or to anyone who wants to find out what we make.

About 45 percent of what the federal government gets comes from individual income taxes.

Forbes magazine did a piece that said that rich people hide more of their income than poor people hide. Well, of course they have more to hide but generally speaking I think Americans are willing to pay their income taxes. They just want to be damn sure they paid their share - not their share and part of someone else's.