MONEY road to wealth

How I Made $100,000 Teaching Online

Meet Nick Walter, a programmer who makes a living seated at his kitchen table.

TIME Money

Here Are the Most Expensive Places to Book a Hotel in the U.S.

Most Expensive CIties to Stay In
Stan Badz—US PGA Tour A course scenic shot at sunrise on the 17th hole during the first round of the Sony Open in Hawaii at Waialae Country Club on January 9, 2014 in Honolulu, Hawaii.

From Butte, Montana., to Panama City, Florida

Planning a spring trip within the United States? You might want to budget a bit more money for a hotel.

The 20 most expensive American cities to stay in are surprisingly scattered across the nation, from Butte, Montana, to Panama City, Florida, according to Hotel.com’s Hotel Price Index, which ranked U.S. metro areas by average nightly hotel prices.

Honolulu, Hawaii, tops the list ($236), with New York, New York, in second ($221), and Boston, Massachusetts, and Miami, Florida tied for third ($187).

Click on the map below to take a closer look at all 20 cities:

For other rankings based on hotel prices, check out Hotel Price Index’s full report.

 

MONEY Odd Spending

‘Spocking': The Weird Way to Ruin Money and Pay Tribute to Leonard Nimoy

To honor Leonard Nimoy and the iconic character he played on Star Trek, all you need is a $5 Canadian banknote and a black marker.

Sir Wilfrid Laurier was a prime minister in Canada from 1896 to 1911, and his face is featured on the Canadian $5 bill. Apparently, some feel his face also resembles Leonard Nimoy, the instantly recognizable actor who served as Star Trek‘s Spock, and who died last week.

Starting a few years back, someone thought it would be funny to take older versions of Canada’s $5 banknotes and artfully add some black ink to the profile of Laurier—darkening and extending the eyebrow, sharpening up the tip of the ear, scratching in a dark bowl-shaped helmet full of hair—so that the resulting image looked like Spock. (Another version of this game turned Laurier’s mug into Severus Snape from the Harry Potter series.)

Now that Nimoy has passed away, fans of the actor and the highly logical Vulcan he played on TV and the movies are being encouraged to “Spock” their Canadian $5 bills in tribute. The “Spock Your Fives” Facebook page—yes, there is such as thing, founded in 2008—has heralded the “revival” of Spocking Fives. As you’d guess, word of this curious activity has spread on social media, like so:

The parody Twitter account @PMLaurier—yes, there is such a thing—recently wished “Adieu to the great Leonard Nimoy” in a Tweet that showed one of the manipulated bills, noting that he was “Honoured so many Canadians thought we looked alike and would ‘Spock’ their $5 bills.”

As for where and how, exactly, the idea of “Spocking” currency first began, the “Spock Your Fives” Facebook page only has this to say: “The origins of this mysterious tradition are shrouded in secrecy, although it is widely believed to be totally awesome.”

TIME Money

These Are the States With the Worst Taxes for Average Americans

Tax Forms
Getty Images 1040 Tax Forms

In these states, higher income leads to decrease in effective tax rate

While a certain degree of income inequality might be expected, the difference between rich and poor Americans has grown dramatically in recent years. As of 2013, the wealthiest 20% of Americans had more income in aggregate than the bottom 80% combined.

State and local tax systems play a significant role in redistributing income among people. The nationwide average effective tax rate for the poorest 20% of Americans was 10.9%, roughly double the 5.4% rate for the top 1%.

When looking at taxes paid as a share of the income earned, all states have a regressive tax system, which means poorer residents are taxed more than the wealthiest ones. The difference in effective tax rates between income groups, however, varies widely between states. According to “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States,” a report released by the Institute on Taxation and Economic Policy (ITEP), Washington has by far the most regressive tax system nationwide. Based on the index score, a ratio calculated from a range of factors to measure income inequality before and after taxes, these are the states with the most unfair tax systems for the average American.

In fact, the poorest 20% of individuals paid at least 12% of their total incomes in state and local taxes in seven of the 10 states with the most regressive tax systems. In contrast, the wealthiest 1% of residents paid no more than 3% in state and local taxes as a share of income in six of the 10 states. In an interview with 24/7 Wall St., Meg Wiehe, state tax policy director at ITEP, said that in most states, and these 10 especially, “tax distribution looks very much like a staircase going down, where as your income goes up, your effective tax rate goes down.”

State residents earning average incomes also often bore a higher tax burden compared to the richest residents. The middle 60% of earners in all of the 10 states paid at least three times what the wealthiest 1% paid, as a share of income, in state and local taxes — all of these ratios were also among the highest nationwide. Middle earners in Washington and Florida, the two most regressive taxation states, paid as a share of their income more than 400% what the richest 1% of residents paid as a share of their income.

Often, it’s the presence or absence of a particular kind of tax that determines the extent to which state tax systems are regressive. For example, taxing goods and services consumed daily such as food is especially regressive because food makes up a much larger share of poorer Americans’ income. A graduated income tax is far more progressive, on the other hand. Five of the 10 states with unfair tax systems taxed food at the state and local level. Also, all but one of the 10 states had relatively low or flat income tax rates, and four had no personal income tax.

According to Wiehe, these states “rely heavily on taxes that are paid disproportionately by low- and middle-income households, and have very little reliance on taxes that the top 1% or top 5% would be responsible for paying.” In other words, states have to make up for that revenue in one way or another. Nationwide, personal and corporate income taxes accounted for an average of nearly 18% of state revenue. Yet in five of the 10 states, the contribution to revenue from income taxes was less than 5%. And while sales and excise taxes accounted for less than one quarter of state revenue on average across the nation, they accounted for more than 30% of revenue in six of the 10 states with the most regressive tax policies.

While it is difficult to know the exact degree that these tax policies impact income inequality, the states with the most regressive tax systems also had relatively uneven income distribution even before taxes were applied. In six of the 10 states, the 2013 Gini coefficient — which has values between zero and one, where one means all income belongs to a single person and zero means uniform income distribution — was higher than in the majority of states.

To identify the 10 states with the worst tax systems for average Americans, 24/7 Wall St. reviewed ITEP’s Tax Inequality Index scores for the 50 states. The index incorporated effective tax rates for the poorest 20%, middle 60%, top 1%, as well as ratios comparing these rates, among other measures. Effective tax rates were based on total state and local taxes as a share of family income for non-elderly taxpayers in all 50 states. ITEP’s model used 2012 income figures, and considered tax laws from 2014 and 2015. Contributions to state revenue by tax type were also provided by ITEP. We reviewed the Gini coefficient from 2013 — which is based on pre-tax income — as well as additional economic data from the Census Bureau’s 2013 American Community Survey.

These are the states with the worst taxes for the average American.

10. Indiana
> ITEP index score: -6.6%
> Effective tax rate lowest 20%: 12.0% (8th highest)
> Effective tax rate top 1%: 5.2% (23rd highest)
> 2013 Gini coefficient (pre-tax): 0.46 (17th lowest)

A negative score on the ITEP index means state residents’ incomes were less equal after taxes than they were before taxes. With a score of -6.6%, Indiana’s tax system was the 10th most regressive among all states. While what makes a tax code fair is a contentious issue, middle class families are often among the hardest-hit by regressive tax policies. Indiana households who earned between $34,000 and $56,000 paid 10.8% of their combined income in state and local taxes, the fourth highest tax burden among that income group nationwide. Indiana’s taxation policies may have had an effect on income inequality in the state. Indiana’s Gini coefficient in 2013 had grown at nearly the fastest pace from 2009.

9. Kansas
> ITEP index score: -6.9%
> Effective tax rate lowest 20%: 11.1% (13th highest)
> Effective tax rate top 1%: 3.6% (11th lowest)
> 2013 Gini coefficient (pre-tax): 0.46 (20th lowest)

While Kansas has a graduated income tax structure — widely regarded as a progressive feature in a tax code — the state has no corporate income tax. This means that the vast majority of businesses in the state are exempt from paying state taxes. Since business owners tend to have relatively high incomes, wealthier Kansas residents have likely benefited from this arrangement. As a share of income, the poorest families in Kansas paid 310% what the wealthiest 1% of families paid in state and local taxes, the ninth highest such ratio nationwide. As in many states, incomes among the wealthiest Kansas residents grew between 2009 and 2013, while incomes among poorer residents shrank. The tax code in Kansas will likely remain relatively unfair to poorer residents. The state’s aggressive income tax cuts of 2012 and 2013 resulted in a budget shortfall. To address the shortfall, Governor Sam Brownback proposed earlier this year to raise several excise taxes.

8. Arizona
> ITEP index score: -7.1%
> Effective tax rate lowest 20%: 12.5% (5th highest)
> Effective tax rate top 1%: 4.6% (19th lowest)
> 2013 Gini coefficient (pre-tax): 0.47 (20th highest)

Families in Arizona earning $22,000 or less in 2012 paid 12.5% of their incomes in state and local taxes, the fifth highest rate for that income group in the country. The wealthiest 1% of Arizona households were subject to an effective tax rate of only 4.6%, which was also smaller than the average tax rate for the wealthiest people across the nation of 5.4%. As in most states ITEP found to have unfair tax systems, sales and excise taxes were considered particularly regressive. The poorest Arizona residents paid more than 8% of their incomes in general sales and excise taxes, while the wealthiest 1% paid just 1% of their incomes in such taxes. States identified as having regressive tax codes did not necessarily have dramatic income inequality. Arizona, however, had a higher Gini coefficient than that of most states, and 18.6% of residents lived in poverty in 2013, among the highest poverty rates nationwide.

7. Tennessee
> ITEP index score: -7.3%
> Effective tax rate lowest 20%: 10.9% (14th highest)
> Effective tax rate top 1%: 3.0% (10th lowest)
> 2013 Gini coefficient (pre-tax): 0.48 (12th highest)

Like in several other states reviewed, Tennessee does not have an individual state income tax on earnings, although residents are required to pay a 6% tax on dividends and interest payments. While the lack of an income tax lowers tax burdens on all residents, it does not do so equally. As a share of income, Tennessee’s poorest 20% of households paid 366% what the state’s wealthiest 1% paid in state and local taxes, the seventh largest such discrepancy nationwide. The income group earning close to average incomes was also disproportionately taxed. The middle 60% of earners in the state paid 280% what the wealthiest 1% paid as a share of income, also the seventh highest such percentage in the country. Incomes among Tennessee’s wealthiest households grew by nearly 3% between 2009 and 2013, versus the comparable national growth rate of 0.4%. Among the nation’s less wealthy earners, including those in Tennessee, incomes shrank.

6. Pennsylvania
> ITEP index score: -7.3%
> Effective tax rate lowest 20%: 12.0% (8th highest)
> Effective tax rate top 1%: 4.2% (14th lowest)
> 2013 Gini coefficient (pre-tax): 0.47 (18th highest)

General sales and excise taxes on everyday goods such as gas are considered regressive because while everyone consumes very similar quantities, not everyone has similar incomes. Pennsylvania, which has a long-term plan to raise taxes to repair its transportation infrastructure, levies a tax of 41.8 cents per gallon of gasoline, the fifth highest rate in the nation. Residents with the lowest 20% of incomes paid 5.8% of their incomes on sales and excise taxes like these, versus the comparable rate of 0.6% for the state’s wealthiest residents. Similarly, while property taxes tend to be levied more proportionately across the nation, Pennsylvania’s poorest households paid nearly 4% of their income on their homes, while the wealthiest 1% paid just 1.6%. This was a relatively large gap compared to other states. Since the bulk of school funding comes from property taxes, such disparity has prompted some to argue that Pennsylvania children receive an “education by zip code.”

5. Illinois
> ITEP index score: -8.1%
> Effective tax rate lowest 20%: 13.2% (3rd highest)
> Effective tax rate top 1%: 4.6% (19th lowest)
> 2013 Gini coefficient (pre-tax): 0.48 (8th highest)

The poorest 20% of Illinois households paid 13.2% of their incomes in state and local taxes, and the middle 60% of earners paid 10.9% of their incomes, both nearly the highest effective tax rates respectively. Meanwhile, the state’s wealthiest residents paid 4.6% of their incomes in state and local taxes, one of the lower effective tax rates. Looking just at income tax, the wealthiest 1% paid a slightly higher effective income tax rate than the poorest 20% of state households. However, Illinois uses a flat income tax rate, which is widely considered to be a regressive feature. The state’s wealthiest residents had especially high incomes. A typical Illinois household in the top quintile earned more than $200,000 in 2013, the ninth highest compared to the wealthiest households in other states.

For the rest of the list, please go to 24/7WallStreet.com.

MONEY stocks

Are International Stocks Still Worth the Risk?

As the Eurozone continues to face the Greek economic crisis and slow growth overall for the continent, many investors are wondering if buying international stocks is worth the risk.

TIME Money

This Chart Shows What Walmart’s Pay Raises Mean for the Minimum Wage

Protestors outside of the Watertown Walmart on Black Friday, Nov. 28, 2014 in Watertown, Wis.
Darren Hauck—Getty Images Protestors outside of the Watertown Walmart on Black Friday, Nov. 28, 2014 in Watertown, Wis.

In a move set to reignite the debate over increasing the federal minimum wage, Walmart said Thursday it’s giving half a million of its employees a raise.

Here’s what’s in store for the 500,000 employees who are paid the company’s baseline wages (which are highly contested numbers), according to a statement:

Current and future associates will benefit from this initiative, which ensures that Walmart hourly associates earn at least $1.75 above today’s federal minimum wage, or $9.00 per hour, in April. The following year, by Feb. 1, 2016, current associates will earn at least $10.00 per hour.

What do Walmart’s raises really mean in context of the minimum wage debate?

As the world’s largest retailer, Walmart’s actions will likely provide a boost to those who want to bump up the federal minimum wage from $7.25 per hour to $10. Those efforts have repeatedly been blocked by some lawmakers in Congress, leading many states to pass their own laws establishing minimum wages above the federal level.

But supporters of a higher federal minimum wage have also called for the rate to be tied to inflation. Why? As inflation increases, the same amount of money buys less stuff — so that $7.25 could feel more like $6.50 or $5.75.

Take a look at the chart above: The federal minimum wage, shown in blue, has been increasing since 1938. But the purchasing power of that wage, shown in orange, has mostly been falling since 1968.

You might notice a slight uptick in the minimum wage’s purchasing power in recent years. That’s because inflation rates were unusually low in the wake of the Great Recession. But as the economy continues returning to normal, expect the minimum wage to lose purchasing power once again.

To bring it back to Walmart: The company isn’t going so far as to tie its baseline wages to inflation. And while any pay raise is certainly better for workers than no raise at all, it’s important to remember that inflation’s impact means raises aren’t always as big as they seem at first.

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