Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, February 5, 2019

AI Summary. New York City ride-share drivers working six days a week can earn roughly $250 a day, or about $72,000 a year from rides plus $1,200–$3,600 from in-car services, before taxes and expenses. Expenses including gas, insurance, and maintenance can approach $20,000 annually, and platforms take 16%–30% of fares.

Kathleen Elkins CNBC
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NYC ride-share drivers can earn $72,000 annually from rides, with additional income from services like Cargo and Play Octopus, totaling around $75,000 before taxes and expenses.

How much do ride-share drivers earn before taxes and expenses?

Core argument: NYC ride-share driver Al Castillo earns roughly $72,000 a year from rides plus $1,200–$3,600 from in-car services like Cargo and Play Octopus, totaling about $75,000 before taxes and expenses.

NYC ride-share drivers like Al Castillo can earn approximately $72,000 annually from rides, with additional income of $1,200 to $3,600 from services like Cargo and Play Octopus, totaling around $75,000 before taxes and expenses. Castillo typically works six days a week, earning about $250 daily, which translates to $1,500 weekly or $6,000 monthly. However, expenses such as gas, insurance, and maintenance can reach nearly $20,000 annually, significantly impacting net earnings. Earnings fluctuate based on factors like surge pricing during peak hours or adverse weather conditions, which can boost daily income to as much as $540. Additionally, tips contribute to income, though only 20% of passengers tip. Platform fees also affect earnings, with Uber and Lyft taking 30% of fares and Juno 16%. Earnings vary by location due to differing mileage and per-minute rates.

Takeaways by Macro Roundup® AI

  1. NYC ride-share driver Al Castillo earns roughly $72,000 a year from rides plus $1,200–$3,600 from in-car services like Cargo and Play Octopus, totaling about $75,000 before taxes and expenses.
  2. Castillo's gas, insurance, and maintenance costs approach $20,000 annually, against gross earnings of about $250 a day, $1,500 a week, or $6,000 a month across a six-day work week.
  3. Uber and Lyft take 30% of fares while Juno takes 16%, and only 20% of passengers tip, though surge pricing during peak hours or bad weather can lift daily income to $540.

"...That means he could be earning about $72,000 a year from rides and between $1,200 and $3,600 a year from Cargo and Play Octopus, for a total of about $75,000. That’s before taxes, though, and doesn’t factor in expenses like gas, insurance and maintenance, which can add up to nearly $20,000 a year...."

Kathleen Elkins, "I spent a day with a full-time Uber, Lyft and Juno driver in NYC—here’s how much he earned in 9 hours,"CNBC, February 4, 2019, https://www.cnbc.com/2019/02/04/how-much-money-nyc-uber-lyft-and-juno-drivers-can-earn-in-a-day.html

I spent a day with a full-time Uber, Lyft and Juno driver in NYC—here’s how much he earned in 9 hours

Al Castillo, 33, drives full-time for Uber, Lyft and Juno in New York City.

He typically works six days a week, Monday through Saturday, for nine to 11 hours a day. And, as I saw when I spent a day shadowing him, he rarely takes breaks. After all, the more rides he completes, the more he gets paid, so “you want to be busy all the time,” he told me. “Our time is money.”

On this particular day, a Wednesday, Castillo worked about nine hours, 7 a.m. to 4 p.m., and earned $233 from 15 rides. Nine rides and $140 came from Lyft, while six rides and $93 came from Uber.

“That’s a good day,” he told me, especially considering he took more breaks than usual to accommodate my filming. On a normal day, he’ll bring home about $250 after 9-11 hours of work, he said.

Castillo gets paid per ride and his earnings depend on how long the trip is, how much distance he covers and whether or not there’s “surge pricing,” when demand for rides is high and prices for passengers go up. Surge pricing, or “prime time,” as Lyft calls it, tends to happen during rush hour, bad weather or if there’s a big event going on in the area.

He can also earn tips. While just 20 percent of passengers leave tips, he estimated, “it helps. Every money helps.”

The app doesn’t show how much the customer paid, Castillo told me — it just breaks down his take per ride. A mid-morning, 22-minute UberX trip earned him nearly $10: He earned a base rate (what you’re paid to start the ride) of $1.83, a time rate (what you earn per minute in your region) of $5.49 and a distance rate (what you earn per mile in your region) of $2. Total: $9.32.

Uber and Lyft both collect about 30 percent of all passenger fares, Castillo told me. Juno takes just 16 percent, but as an app it’s not as popular yet, he added. Sure enough, we didn’t get one call from Juno over the course of the day and, instead, flipped back and forth between Uber and Lyft.

Still, he has all three because, depending on what neighborhood he’s driving in, one app may be busier than the others. “People in Bed Stuy like to use Lyft,” he said. “If you’re in Queens, people like Juno.”

If Castillo earns $250 a day and works Monday to Saturday, that’s $1,500 per week, which comes out to about $6,000 a month. He earns an additional $100 to $300 per month by using Cargo, which pays him a monthly rate for selling products like snacks and headphones to passengers, and Play Octopus, which pays him to mount a tablet that offers trivia games and plays ads.

That means he could be earning about $72,000 a year from rides and between $1,200 and $3,600 a year from Cargo and Play Octopus, for a total of about $75,000. That’s before taxes, though, and doesn’t factor in expenses like gas, insurance and maintenance, which can add up to nearly $20,000 a year.

Besides expenses, a driver’s take home pay will also depend on where they’re located, as mileage and per-minute rates vary by city.

And some days, you’re going to get luckier than others, Castillo told me. On his best day, he took home $540 after nine hours of driving, thanks to surge pricing. One-fifth of that came from a single, lucrative trip to the airport: “It was snowing and it was ugly outside. It was like 5:30 or 6 p.m., peak hours. They paid me like $110.”

Another time, after completing a $20 ride, Castillo recalled, the passenger gave him “a $100 tip, because it was Christmas.”

AI Summary. A progressive wealth tax targeting the top 0.1% of U.S. wealth holders, who own more than 20% of total wealth, could levy 2% annually on net wealth between $50m and $1bn and 3% above $1bn, with revenue estimated at $2.75tn over a decade. The economics literature suggests such a tax could reduce wealth inequality without significantly affecting GDP growth.

Gabriel Zucman University of California
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A progressive wealth tax could target the top 0.1% of wealth holders, who own 20% of US wealth. A 2% tax on wealth btw $50m & $1bn, and 3% on wealth above $1bn, could generate $2.75tn over a decade.

Can a progressive wealth tax reduce inequality without slowing growth?

Core argument: A progressive wealth tax levying 2% on net wealth between $50m and $1bn and 3% above $1bn is estimated to raise $2.75tn over a decade from the top 0.1% of wealth holders, who own more than 20% of U.S. wealth.

A progressive wealth tax could be implemented by targeting the top 0.1% of wealth holders, who collectively own more than 20% of total U.S. wealth. This approach would involve an annual tax on net wealth above a certain threshold, such as $50m, with rates increasing progressively. For instance, a 2% tax on wealth between $50m and $1bn and a 3% tax on wealth above $1bn could generate significant revenue, estimated at $2.75tn over a decade. The economic literature suggests that such a tax could reduce wealth inequality without significantly impacting GDP growth, as the ultra-wealthy tend to save rather than spend additional income. Moreover, the administrative feasibility of a wealth tax has been supported by advancements in financial reporting and valuation techniques, which can accurately assess asset values. Implementing a wealth tax would require robust enforcement mechanisms to prevent tax evasion and ensure compliance, potentially involving international cooperation to address offshore holdings.

Takeaways by Macro Roundup® AI

  1. A progressive wealth tax levying 2% on net wealth between $50m and $1bn and 3% above $1bn is estimated to raise $2.75tn over a decade from the top 0.1% of wealth holders, who own more than 20% of U.S. wealth.
  2. The economics literature suggests such a wealth tax would reduce wealth inequality without significantly affecting GDP growth, because the ultra-wealthy tend to save rather than spend additional income.
  3. Advances in financial reporting and valuation techniques support the administrative feasibility of a wealth tax, while enforcement against evasion would require robust mechanisms, potentially including international cooperation on offshore holdings.

Just an FYI in case this comes up on the BBC tomorrow, Saez/Zucman theorize on how to implement Warren's proposed wealth tax Emmanuel Saez and Gabriel Zucman, "How would a progressive wealth tax work? Evidence from the economics literature," University of California, February 5, 2019, https://eml.berkeley.edu/~saez/saez-zucman-wealthtaxobjections.pdf

Wednesday, February 6, 2019

AI Summary. The number of high-income countries with individual net wealth taxes fell from 12 in 1990 to four—France, Norway, Spain, and Switzerland—and the OECD reported such taxes raised between 0.2% of GDP in Spain and 1.0% in Switzerland, or 0.5% to 3.7% of total tax revenues. Switzerland is an exception because its wealth tax substitutes for property taxes, yielding higher revenue.

Timothy Taylor Conversable Economist
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Wealth taxes have fallen out of favor globally. By 2017, only 4 high-income countries retained wealth taxes, down from 12 in 1990. @TimothyDTaylor

Do wealth taxes raise enough revenue to be worth keeping?

Core argument: By 2017, only four high-income countries—France, Norway, Spain, and Switzerland—still levied wealth taxes, down from 12 in 1990.

By 2017, only four high-income countries—France, Norway, Spain, and Switzerland—retained wealth taxes, down from 12 in 1990. The OECD reported that in 2016, tax revenues from individual net wealth taxes ranged from 0.2% of GDP in Spain to 1.0% in Switzerland, with these taxes contributing just 0.5% to 3.7% of total tax revenues. Switzerland is an exception, using wealth taxes as a substitute for property taxes, resulting in higher revenue. The limited revenue generated by wealth taxes has led many countries to abandon them, questioning their efficacy and administrative burden. This trend suggests that a US wealth tax targeting individuals with over $50m may not yield significant revenue, reflecting broader global skepticism about the financial impact of such taxes.

Takeaways by Macro Roundup® AI

  1. By 2017, only four high-income countries—France, Norway, Spain, and Switzerland—still levied wealth taxes, down from 12 in 1990.
  2. The OECD reported that in 2016 individual net wealth tax revenues ranged from 0.2% of GDP in Spain to 1.0% in Switzerland, contributing 0.5% to 3.7% of total tax revenues.
  3. Switzerland is an exception, using its wealth tax as a substitute for property taxes and collecting higher revenue as a result, while limited revenue elsewhere led many countries to abandon such taxes.

Breaking rule for this factoid from Tim Taylor (might be useful for BBC interview)

".... Back in 1990, 12 high-income countries had wealth taxes. By 2017, that had dropped to four: France, Norway, Spain, and Switzerland (In 2018, France changed its wealth tax so that it applied only to real estate, not to financial assets.).... It's interesting, then, that in these European countries the wealth tax generally accounted for only a small amount of government revenue. The OECD writes: "In 2016, tax revenues from individual net wealth taxes ranged from 0.2% of GDP in Spain to 1.0% of GDP in Switzerland. As a share of total tax revenues, they ranged from 0.5% in France to 3.7% in Switzerland... Switzerland has always stood out as an exception, with tax revenues from individual net wealth taxes which have been consistently higher than in other countries..." However, Switzerland apparently has no property tax, and instead uses the wealth tax as a substitute. The fact that wealth taxes collect relative little is part of the reason that a number of countries decided that they weren't worth the bother. In addition, it suggests that a US wealth tax which doesn't kick in until $50 million in wealth or more will not raise meaningfully large amounts of revenue....."

Timothy Taylor, "Why Have Other Countries Been Dropping Their Wealth Taxes?," Conversable Economist, February 4, 2019, http://conversableeconomist.blogspot.com/2019/02/why-have-other-countries-been-dropping.html