MRRR and Inflation

MINIMUM REQUIRED INVESTMENT RATE of RETURN on next after tax dollar invested  is between 2% and 9.6% adjusted for Inflation- just to maintain your Standard of Living in the future. 

 State tax burdens add a varying extra burden, leaving you with less after -tax dollars to invest.

 Simply put: your investment return -at a minimum - must be greater than this Minimum rate before you can judge yourself to be better off.

 This is Data from Tax Foundation - www.taxfoundation.org

 To determine your personal MRRR:
      
1. Find your State in first column.
2.  Find your Inflation estimate in Row 5.
      NOW:



3.   Find your Marginal Tax rate in Row 5 under your Inflation estimate, look 
down the rows for your State to find your own MRRR.
Example: You live in New York State and are in the maximum Federal tax bracket.
If you believe official inflation numbers then your MIRR is 2.87%.
If you want to use the Average Inflation rate above, your MIRR rises to 8.32%.
If you believe that the real Inflation rate you are actually experiencing is
closer to the high number, then your MIRR is 13.77%.
     INFLATION RATES      INFLATION RATES      INFLATION RATES
CPI-U AVG SGS CPI-U AVG SGS CPI-U AVG SGS
2.00 5.80 9.60
  Federal Tax Bracket   Federal Tax Bracket   Federal Tax Bracket
35 25 15 35 25 15 35 25 15
State                             Combined MRRR by State                             Combined MRRR by State                             Combined MRRR by State
Ala. 2.87 2.67 2.47 8.31 7.73 7.15 13.76 12.80 11.84
Alaska 2.74 2.54 2.34 7.93 7.35 6.77 13.13 12.17 11.21
Ariz. 2.88 2.68 2.48 8.36 7.78 7.20 13.84 12.88 11.92
Ark. 2.87 2.67 2.47 8.33 7.75 7.17 13.78 12.82 11.86
Calif. (b) 2.86 2.66 2.46 8.30 7.72 7.14 13.74 12.78 11.82
Colo. 2.85 2.65 2.45 8.26 7.68 7.10 13.67 12.71 11.75
Conn. 2.83 2.63 2.43 8.20 7.62 7.04 13.57 12.61 11.65
Del. 2.70 2.50 2.30 7.83 7.25 6.67 12.96 12.00 11.04
Fla. 2.83 2.63 2.43 8.21 7.63 7.05 13.60 12.64 11.68
Ga. 2.84 2.64 2.44 8.23 7.65 7.07 13.62 12.66 11.70
Hawaii (c) 2.79 2.59 2.39 8.08 7.50 6.92 13.38 12.42 11.46
Idaho 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
Ill. 2.86 2.66 2.46 8.31 7.73 7.15 13.75 12.79 11.83
Ind. 2.84 2.64 2.44 8.24 7.66 7.08 13.63 12.67 11.71
Iowa 2.84 2.64 2.44 8.23 7.65 7.07 13.61 12.65 11.69
Kans. 2.87 2.67 2.47 8.31 7.73 7.15 13.75 12.79 11.83
Ky. 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
La. 2.88 2.68 2.48 8.34 7.76 7.18 13.81 12.85 11.89
Maine 2.80 2.60 2.40 8.12 7.54 6.96 13.44 12.48 11.52
Md. 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
Mass. 2.83 2.63 2.43 8.19 7.61 7.03 13.56 12.60 11.64
Mich. 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
Minn. 2.84 2.64 2.44 8.25 7.67 7.09 13.65 12.69 11.73
Miss. 2.84 2.64 2.44 8.24 7.66 7.08 13.63 12.67 11.71
Mo. 2.85 2.65 2.45 8.26 7.68 7.10 13.68 12.72 11.76
Mont. (d) 2.70 2.50 2.30 7.83 7.25 6.67 12.96 12.00 11.04
Nebr. 2.84 2.64 2.44 8.22 7.64 7.06 13.61 12.65 11.69
Nev. 2.86 2.66 2.46 8.29 7.71 7.13 13.72 12.76 11.80
N.H. 2.70 2.50 2.30 7.83 7.25 6.67 12.96 12.00 11.04
N.J. (e) 2.84 2.64 2.44 8.23 7.65 7.07 13.63 12.67 11.71
N.M. (c) 2.84 2.64 2.44 8.25 7.67 7.09 13.66 12.70 11.74
N.Y. 2.87 2.67 2.47 8.32 7.74 7.16 13.77 12.81 11.85
N.C. 2.84 2.64 2.44 8.23 7.65 7.07 13.62 12.66 11.70
N.D. 2.83 2.63 2.43 8.20 7.62 7.04 13.57 12.61 11.65
Ohio 2.83 2.63 2.43 8.22 7.64 7.06 13.61 12.65 11.69
Okla. 2.87 2.67 2.47 8.33 7.75 7.17 13.79 12.83 11.87
Ore. 2.70 2.50 2.30 7.83 7.25 6.67 12.96 12.00 11.04
Pa. 2.83 2.63 2.43 8.20 7.62 7.04 13.57 12.61 11.65
R.I. 2.84 2.64 2.44 8.24 7.66 7.08 13.63 12.67 11.71
S.C. 2.84 2.64 2.44 8.24 7.66 7.08 13.64 12.68 11.72
S.D. 2.81 2.61 2.41 8.14 7.56 6.98 13.48 12.52 11.56
Tenn. 2.89 2.69 2.49 8.38 7.80 7.22 13.87 12.91 11.95
Tex. 2.86 2.66 2.46 8.30 7.72 7.14 13.74 12.78 11.82
Utah (b) 2.83 2.63 2.43 8.22 7.64 7.06 13.60 12.64 11.68
Vt. 2.82 2.62 2.42 8.19 7.61 7.03 13.55 12.59 11.63
Va. (b) 2.80 2.60 2.40 8.12 7.54 6.96 13.44 12.48 11.52
Wash. 2.88 2.68 2.48 8.34 7.76 7.18 13.80 12.84 11.88
W.Va. 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
Wis. 2.81 2.61 2.41 8.14 7.56 6.98 13.48 12.52 11.56
Wyo. 2.81 2.61 2.41 8.14 7.56 6.98 13.47 12.51 11.55
D.C. 2.82 2.62 2.42 8.18 7.60 7.02 13.54 12.58 11.62
2.83 2.63 2.43 8.20 7.62 7.04 13.57 12.61 11.65











STATE and Local Tax Rates as of January 1, 2012 (taxfoundation.org)

State and Local Sales Tax Rates
As of January 1, 2012
State State Tax Rate Rank Avg. Local Tax Rate (a) Combined Rate Rank State
Ala. 4.00% 38 4.33% 8.33% 8 Ala.
Alaska None 46 1.77% 1.77% 46 Alaska
Ariz. 6.60% 9 2.52% 9.12% 2 Ariz.
Ark. 6.00% 16 2.58% 8.58% 6 Ark.
Calif. (b) 7.25% 1 0.86% 8.11% 12 Calif. (b)
Colo. 2.90% 45 4.54% 7.44% 15 Colo.
Conn. 6.35% 11 None 6.35% 31 Conn.
Del. None 46 None 0.00% 47 Del.
Fla. 6.00% 16 0.62% 6.62% 29 Fla.
Ga. 4.00% 38 2.84% 6.84% 24 Ga.
Hawaii (c) 4.00% 38 0.35% 4.35% 45 Hawaii (c)
Idaho 6.00% 16 0.02% 6.02% 35 Idaho
Ill. 6.25% 13 1.95% 8.20% 10 Ill.
Ind. 7.00% 2 None 7.00% 20 Ind.
Iowa 6.00% 16 0.81% 6.81% 25 Iowa
Kans. 6.30% 12 1.96% 8.26% 9 Kans.
Ky. 6.00% 16 None 6.00% 36 Ky.
La. 4.00% 38 4.85% 8.85% 3 La.
Maine 5.00% 31 None 5.00% 43 Maine
Md. 6.00% 16 None 6.00% 36 Md.
Mass. 6.25% 13 None 6.25% 33 Mass.
Mich. 6.00% 16 None 6.00% 36 Mich.
Minn. 6.875% 7 0.30% 7.18% 17 Minn.
Miss. 7.00% 2 0.004% 7.00% 19 Miss.
Mo. 4.225% 37 3.26% 7.49% 14 Mo.
Mont. (d) None 46 None 0.00% 47 Mont. (d)
Nebr. 5.50% 28 1.27% 6.77% 26 Nebr.
Nev. 6.85% 8 1.08% 7.93% 13 Nev.
N.H. None 46 None 0.00% 47 N.H.
N.J. (e) 7.00% 2 -0.03% 6.97% 22 N.J. (e)
N.M. (c) 5.125% 30 2.12% 7.24% 16 N.M. (c)
N.Y. 4.00% 38 4.48% 8.48% 7 N.Y.
N.C. 4.75% 35 2.10% 6.85% 23 N.C.
N.D. 5.00% 31 1.39% 6.39% 30 N.D.
Ohio 5.50% 28 1.25% 6.75% 27 Ohio
Okla. 4.50% 36 4.16% 8.66% 5 Okla.
Ore. None 46 None 0.00% 47 Ore.
Pa. 6.00% 16 0.34% 6.34% 32 Pa.
R.I. 7.00% 2 None 7.00% 20 R.I.
S.C. 6.00% 16 1.13% 7.13% 18 S.C.
S.D. 4.00% 38 1.39% 5.39% 41 S.D.
Tenn. 7.00% 2 2.45% 9.45% 1 Tenn.
Tex. 6.25% 13 1.89% 8.14% 11 Tex.
Utah (b) 5.95% 27 0.73% 6.68% 28 Utah (b)
Vt. 6.00% 16 0.14% 6.14% 34 Vt.
Va. (b) 5.00% 31 None 5.00% 43 Va. (b)
Wash. 6.50% 10 2.30% 8.80% 4 Wash.
W.Va. 6.00% 16 None 6.00% 36 W.Va.
Wis. 5.00% 31 0.43% 5.43% 40 Wis.
Wyo. 4.00% 38 1.34% 5.34% 42 Wyo.
D.C. 6.00% (16) - 6.00% (36) D.C.
Note: Some states levy gross receipts taxes in addition to sales taxes. See Table 20 for information on gross receipts taxes.
(a) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate.
(b) Three states collect a separate, uniform "local" add-on sales tax: California (1%), Utah (1.25%), Virginia (1%). We include these in their state sales tax.
(c) The sales taxes in Hawaii, New Mexico and South Dakota have broad bases that include many services, so their rates are not strictly comparable to other states.
(d) Due to data limitations, table does not include sales taxes in local resort areas in Montana.
(e) Some counties in New Jersey are not subject to the statewide sales tax rate and collect a local rate of 3.5%. Their average local score is represented as a negative.
Source: Tax Foundation; Sales Tax Clearinghouse

Tax Foundation
www.TaxFoundation.org


MINIMUM  % REQUIRED RATES  OF RETURN To BREAK EVEN after inflation.
            see below for definitions of CPI-U and SGS                                

 Below are two sources of more realistic data than the Dept of Labor inflation measures. The first, the Billion Price project from MIT and the second from John Williams's Shadow Goverment Statistics site. 
The CPI-U (consumer price index) is the broadest measure of consumer price inflation for goods and services published by the Bureau of Labor Statistics (BLS). 
While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms of year-to-year percent change in the price index.

So why does that matter? According to John Williams definitions: 

" The CPI-U (Consumer Price Index for All Urban Consumers) is the monthly headline inflation number (seasonally adjusted) and is the broadest in its coverage, representing the buying patterns of all urban consumers. Its standard measure is not seasonally adjusted, and it never is revised on that basis except for outright errors" for July 2011 this number is 3.63%.

 "THE SGS Alternative CPI-U measures are attempts at adjusting reported CPI-U inflation for the impact of methodological change of recent decades designed to move the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.


 For every one of us the lesson is that we must increase our income or the minimum rate of return on our invested dollars must be increasing at least at this minimum inflation rate to maintain the same standard of living we enjoy now.

 That would be a reasonably attainable goal were it not for Government at all levels making it more difficult with a vast array of taxes, levies and fees  of all sorts.

 This minimum rate must be adjusted for the effect of Government dipping into your wallet before you get to use what is left over. Please go to the MRRR tab to calculate your personal Minimum required rate of return to maintain your standard of living.
                            --------ooOOOoo--------

 The Billion Price  Project
The MIT's billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%. 





 August, 18th, 2011


 • Inflation Spreads Throughout Economy as Annual “Core” Inflation Jumps Again
• Consumer Inflation at 33-Month High
• July’s Annual Inflation: 3.6% (CPI-U), 4.1% (CPI-W), 11.2% (SGS)

 Courtesy:John Williams, Shadow Government Statistics; www.shadowstats.com



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