Sunday, January 14th, 2024

This week’s core story is about: How states tax their wealthiest and poorest residents.

Update: The Bagel will return to a daily format on Monday, February 5th! 

Details:

• The Bagel will return to a daily 5-minute read highlighting the research discoveries behind today’s most important issues.

• The newsletter will look and feel similar to today’s, particularly in terms of brevity and personality (get ready to have some fun!).

• You don’t have to do anything! No new lists to join or forms to fill out, just sit tight and The Bagel will hit your inbox each morning!

That’s it for now. See you next weekend!

KNEAD TO KNOW

Most State Tax Systems Worsen Inequality

The Institute on Taxation and Economic Policy released its latest Who Pays? report, finding the vast majority of state tax systems are “upside down,” with lower-income households paying a far greater share of their income in taxes than the wealthy. 

What to know:

The report found 44 states worsen inequality by making incomes more unequal after collecting state and local taxes, while just six (plus Washington, D.C.) reduce inequality. 

• On average, the poorest 20% of U.S. taxpayers face a state and local tax rate that’s nearly 60% higher than that of the top 1%.

• Tax systems in 42 states tax the top 1% at a lower rate than every other income group, while most states (36) tax their poorest residents at a higher rate than every other group. 

“When you ask people what they think a fair tax code looks like, almost nobody says we should have the richest pay the least,” said report author Carl Davis. “There’s an alarming gap here between what the public wants and what state lawmakers have delivered.”

What’s behind it:

The disparity in state tax systems is “largely driven by weak or nonexistent personal income taxes in many states,” according to the report. 

• In those weak systems, much of the income of the ultra-wealthy avoids taxation altogether, forcing the state to rely more on regressive taxes like sales and excise taxes, which disproportionately impact the poor and help fuel inequality.

QUICK BITES

Republican Disapproval of January 6 Is Waning

A new survey by CBS News found that while most of the Republican party (70%) continues to disapprove of the actions by Trump supporters on January 6, the share that strongly disapproves has fallen from 51% in the weeks after the riot to just 32% today. Outright approval within the party has also risen from 21% after the attack to 30% today.

• Why it matters: A majority of Republicans describe the actions of those on January 6 as “patriotism” (51%) and “defending freedom” (59%), though 40% acknowledge the rioters were “trying to overturn the election and keep Donald Trump in power.”

Black Household Wealth Is Rising, as Is the Racial Wealth Gap

A new analysis by researchers at the Brookings Institution found median Black household wealth increased from $27,970 in 2019 to $44,890 in 2022. Despite the increase, the difference in wealth between the median white and Black households reached $240,120 in 2022, up from an average of $172,000 from 1989 to 2022.

• What it means: In 2022, for every $100 held in wealth by white households, Black households held only $15, according to the analysis.

A Newly Discovered Dinosaur May be the Closest Known Relative of Tyrannosaurus rex

A new study by researchers at the University of Bath in the U.K. identifies the Tyrannosaurus mcraeensis (pictured above), a newly discovered subspecies of tyrannosaur that’s more primitive than its famous cousin, predating the T. rex by 3 to 5 million years. The study is based on a partial skull previously discovered in western New Mexico that scientists believed to be that of a T. rex. 

• Why it matters: While unlikely to be a direct relative, T. mcraeensis may be the closest known relative of T. rex, shedding light on how the tiny-armed predator suddenly appeared in North America some 66 million years ago.

OUTSIDE THE LOX

Revealing Secrets Won’t Cause the Damage We Think It Will

We all keep secrets. 

Sometimes they’re small, like not knowing how to ride a bike, and sometimes they’re big, like being physically attracted to the members of Blue Man Group.

• Regardless of the magnitude, the nature of the information is always the same: confidential. 

• Why? Put simply: fear. We fear something – the embarrassment, pain, guilt, etc. – we may feel or cause if our secret gets exposed.

Well, a new study by researchers at The University of Texas at Austin shows those fears may be overblown, finding people consistently overestimate the negative impact of revealing secrets about themselves to others.

• In a series of 12 experiments, the researchers found people’s expected judgment before revealing a secret was consistently worse than the actual judgment they received after sharing, regardless of the magnitude of the secret or the relationship with the recipient.

Why it matters:

The researchers found that while revealers of secrets are focused on the expected negative impacts, recipients are thinking about the positive traits required to share the secret, like trust, honesty, and vulnerability.

• Thus, rest assured, if you have a secret you’re scared of sharing, like admitting you don’t understand how fractions work (who even does), revealing the secret probably won’t go as badly as you fear.

OVEN-FRESH STATS

• 83 - The number of elections to be held this year in countries around the world, the largest concentration of elections in a year for at least the next 24 years, according to consulting firm Anchor Change. The elections will impact some 4 billion people worldwide. 

• 19.6% - The amount of office space in major U.S. cities that wasn’t leased as of the fourth quarter of 2023, up from 18.8% a year earlier, according to Moody’s Analytics. American offices are more empty today than at any point in at least the past four decades.

• 43% - The percentage of U.S. adults who identify as political independents, tying the record high measured in 2014, according to a new survey by Gallup. Equal shares (27%) of respondents identified as Republicans and Democrats, in line with recent measures for Republicans and marking a new low for Democrats. 

• 4.1 trillion - The number of global on-demand music streams in 2023, up 22.3% from 2022, according to a new report by Luminate. Taylor Swift dominated the U.S. market, accounting for 1.79% of total streams (about one out of every 78 U.S. audio streams).

EXTRA SCHMEAR

Long Video. Why does fire only exist on Earth? (13 min) 

Short Video. From bluffs to bets, learn the history of poker. (6 min)

Fun Video. How did Americans become so obsessed with big cars? (11 min)

Good Read. Learn about Curt Bloch, the Jewish lawyer who published 95 issues of a satirical magazine while hiding from the Nazis. (781 words; 3 min)

Neat List. Take a look at some of the coolest tech coming out of CES 2024.

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Written by Ryan Wittler