Newspaper Article Archive of
The Kalona News
Kalona, Iowa
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Newspaper Article Archive of
The Kalona News

January 4, 2018 Billionaire averages
Article Pages -- as published on the The Kalona News website.

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ARTICLE DESCRIPTION:

I am excited for 2018! Like most of the people I know, 2017 will go down in my memory mostly for bad things. (Of course, I don’t know many billionaires. I’m sure most of them had a great year!)

Anyway, here is to a fresh start in 2018! I hope things go well for you and yours!

Speaking of billionaires, I am a social worker, not a math teacher. But in light of the dreadful tax bill recently passed by the Republicans in Congress, we need a primer on the concept of averages.

An average is: “the result obtained by adding together several quantities and then dividing this total by the number of quantities.” So if you add 10, 20, and 30, you get 60. Divided by three numbers in the set, you get 20. 20 is the average. Averages are great unless you have extremes in the set.

For example: Bill Gates and I have an average wealth of $40 billion. Hank Aaron and I hit an average of 378 Major League homeruns. The Beatles and I have an average of nine No. 1 hits. In these examples, the average does not provide us relevant information.

I am seeing the same thing with the tax bill. Some Republican members of Congress are claiming that the average household would get a tax cut of $1,610 in 2018. But extremes are included in averages. A household earning $1 million or more would get an average tax cut of $69,660. Compare that with the tax cut of $870 for an average household earning $50,000 to $75,000.

A much better measure in this case would be median. In other words, the point in the set where 50 percent of the numbers are higher, and 50 percent of the numbers are lower. That gives us a much better lens through which we can view the tax cut.

Is this tax cut good for the average person? No. Not at all. It isn’t good for the median, either!

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