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The publication of This Side of Paradise when he was 23 immediately put Fitzgerald’s income in the top 2 percent of American taxpayers. Thereafter, for most of his working life, he earned about $24,000 a year, which put him in the top 1 percent of those filing returns. Today, a taxpayer would have to earn at least $500,000 to be in the top 1 percent. The 1920 census reported the American population as 106,021,537. That year only roughly 7 percent of the population—7,259,944—even filed tax returns. Today, about 45 percent of the population files returns: 134,000,000 returns out of a population of 300,000,000.
What would Fitzgerald’s $24,000 annual income be worth today? It’s hard to say. Most economists, based on the Bureau of Labor’s Consumer Price Index, would multiply the amount by 12. That seems low. The CPI was designed in 1919, because prices had risen during World War I, to provide an index for cost-of-living adjustments for workers’ wages. The CPI today indexes all goods and services purchased by a middle-class consumer—which is not what we’re after. If you used Manhattan townhouses or beachfront property in the Hamptons as a basis for analysis, the multiplier would be astronomical. Perhaps a more reasonable measure for a high-income person would be the luxury car. In 1920, you could buy a Packard Single 6 for $2,975, which is probably the equivalent today of a Mercedes S550 costing $90,000, which suggests a multiple of about 30. If, to avoid exchange-rate issues, you used Cadillacs as the measure, it would be 20 times—$2,400 in 1925 and $48,000 today. The current dollar, based on that measure, is worth five cents compared to that of Calvin Coolidge’s day.
If we accept a 20-times measure, the modern equivalent of Fitzgerald’s annual income would be roughly $500,000. But a person earning $500,000 today does not live as well as Fitzgerald did. First, Fitzgerald’s income was almost tax free (5.5 percent effective rate), while today’s taxpayer making $500,000 would probably pay 40 percent in income and Social Security taxes. Second, various social changes have reduced the availability of servants—Fitzgerald had many—and has made having them so expensive that only the very wealthy can afford them. During the 1920s and 1930s, an upper-middle-class family generally had servants.
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