GDP Growth, Tardy Cars & The Real Cost of Coffee

Tax Tables

In 2016, the latest year for which data are available, there were 140.9 million taxpayers. The top 1%, (Adjusted Gross Income/AGI > $480,804), earned 19.7% of all income, paid 37.3% of all income taxes, and had an average tax rate of 26.9%. By contrast, the bottom 50% of taxpayers, (AGI < $40,078), earned 11.6% of all income, paid 3% of all income taxes, and had an average income tax rate of 3.7%.

Dollar Delivery

The state with the highest ratio of federal revenues received to federal taxes paid is KY at 2.35. They paid $30.1 billion but received $70.8 billion, a difference of $9,145/person. NM followed at 2.34, or $8,692/person. CT had the worst ratio, 0.74 as federal taxes paid were $55.5 billion, but they received just $41.1 billion back, a loss of $4,000/person. NJ followed at 0.82 or a loss of $2,368/person.

Good GDP

US GDP grew at a strong 2.6% annualized rate in 18Q4, resulting in Current Year/CY2018 GDP growth of 2.9%, and growth of even 3.1% if comparing 18Q4 from a year earlier. However, no matter how measured, growth is slowing. It was 3.4% in 18Q3; 4.2% in 18Q2. In CY2019, growth will slow to 2.4%, and to 2.1% in CY2020 as the impact from tax cuts and spending increases completely dissipates.

Concrete Construction

During the 20th century, the US consumed 4.4 gigatons of cement. By contrast, during 2011-2013 China used 6.4 gigatons of cement; 45% more than the US used in 100 years; amazing! Why? China has 221 cities with over a million persons; the US just 35, China’s population is vastly larger than the US population, Chinese primarily live in multifamily structures, China lacks lumber, and building methods have changed.

Awful Autos

A record 7 million Americans are 90 days or more behind on their car loans. While more than 5.8 million were delinquent during the Great Recession, as a percentage of auto loans outstanding, today’s rate is 4.5% vs 5.3% at the 2010 peak. While this is a growing problem, auto loans total $1 trillion, much smaller than the $9 trillion home mortgage market where delinquencies are at an 18-year low.

Comparative Caffeine

While the cost of a plain 16oz cup of coffee at Dunkin’ Donuts, McDonald’s, Starbucks and 7-Eleven ranges from roughly $1.20 to $2.65, caffeine content/cup also varies, specifically, from a low of almost 150mg/cup to almost 350mg/cup. Now, comparing milligrams of coffee per dollar, the best value is 7-Eleven at 129mg/$1, followed by Starbucks at 125mg/$1, McDonald’s at 122mg/$1, and Dunkin’ Donuts at 100mg/$1.

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