Average Income Among America’s 400 Richest Dropped 25% In One Year

Guess who’s making about $202.4 million? Not you, unless you happen to be among the 400 richest tax filers in the nation. While it might bum you out a bit not to be rolling around in piles of cash, those who live like Richie Rich are likely feeling a bit blue about the news because that 2009 average is down 25% from 2008 — and down from a peak of $344.8 million in 2007.

According to the latest tax data from the Internal Revenue Service in its annual analysis of the 400 filers with the highest adjust gross incomes, the rich made an average of $270.5 million in 2008. They might’ve made even more than that, as the AGI doesn’t include tax-exempt income, reports CNNMoney.

While we might grumble over paying taxes, if you were in the top 400, you’d have handed over about $41 million in 2009 in federal income taxes. Mind boggled yet?

That dip in income for the super wealthy could’ve had an effect on how free they were with their cash, as charitable deductions dropped by 28% from the year before.

I would still settle for the $202 million, hands down.

Average income of super rich: $202.4 million [CNNMoney]


Edit Your Comment

  1. mauispiderweb says:

    We need a revolution.

    • wade says:

      You say you want a revolution?

      Well, you know, we all want to change the world.

    • Mark702 says:

      The Ron Paul Revolution has change politics more in the last 5 years than anyone else has in the last 20.

      • Lt. Coke says:

        Yeah, the stupid used to be ashamed of themselves. Now they wave flags from their government-purchased wheelchairs.

      • Talmonis says:

        And Ron Paul’s policies will only make the rich richer, and the poor WAY poorer than they are right now. Oh, that and the whole deregulation thing of just about every corporation.

  2. Loias supports harsher punishments against corporations says:

    I’d gladly pay 41 million in taxes in exchange for 161 million.

    • frank64 says:

      You have it backwards. They don’t pay 41 million so they can make 161, they pay 41 BECAUSE they make 161.

      • Loias supports harsher punishments against corporations says:

        I think you’re over-parsing my words. For what purpose, I don’t understand.

        Besides, you didn’t get the numbers. They don’t make 161 mil, they make 202 mil. Then pay 41 mil in taxes. Net result: 161 million. Not too shabby.

      • RvLeshrac says:


        • frank64 says:

          I understand the meaning of your rant, but that they benefit from our gov does not mean they should pay and unlimited amount, they should pay for what they receive, and I believe they do, with some exceptions. Where we draw the line is open to debate agreed, but at least possible 41 million is enough, and we don’t need to demonize them for only paying 41 million were I pay 41 million less if you include a rounding error. I at least an thankful.

    • Blueskylaw says:

      I wish I was paying $500,000,000 in taxes every year because
      that would mean that i’m making a hell of a lot more than that.

      • Bsamm09 says:

        Not necessarily. If you were a shareholder in an S-corp or a partner in a partnership, you can easily pay a lot in taxes and not have received a lot of actual money. I’ve seen instances of people who are shareholders in an S-corp get allocated $500k in income and the only money they receive is a distribution to pay the tax and a tiny bit extra.

        All the while, this $500k in income forces them to pay top rates on their Social Security (it also makes them get taxed on 80% of Social Security) and all W2 income is now taxed at top marginal rate when all the cash they actually received was $15k in SS, $30k on a W2 and $150k ($148 of which went to pay the tax solely on the $500k of S-corp income).

        TL:DR — amount paid in taxes doesn’t always correlate to actual income you ever see except on paper.

        • Kate says:

          I’m not seeing how that could work. You may go over a limit and pay more out of a new amount more than you are making otherwise, but I doubt it would be ‘just a tiny bit more’ unless someone is jiggering the math and what is counted.

          • Bsamm09 says:

            The tiny bit extra is the amount they decide to distribute, they could distribute $0 and stick you with the tax bill (unlikely though) or distribute all $500k to you (unlikely also).

            Here is a K1 from an S-corp: http://www.irs.gov/pub/irs-pdf/f1120ssk.pdf

            Look at box #1. Put $500,000 in there. This will flow to page 2 of your schedule E and then to your 1040. Say the S-corp only distributed exactly the amount to pay the tax on that $500k. Now your salary is taxed at the highest marginal rate, 80% your social security is taxed at the top rate now too.

            Using the numbers from my previous post, you paid tax on $542,000 in income but only received $195,000 before any taxes were taken out. I’ll assume a tax rate of 30% avg on the $500k which is $150,000 in tax. 45.65% on the $30,000 which is $13,695 and 35% on $12,000 which is $4,200 for a grand total of $167,895 paid in Federal taxes when you only received $195,000 cash. (State tax excluded)

            (hopefully that company goes public, distributes more cash out and doesn’t go bankrupt.)

            • RvLeshrac says:

              Excepting that, as a board member and someone in direct control of the company, part of your responsibility is to see that the taxes aren’t filed like that.

              • Bsamm09 says:

                How are you a board member? I know a few who aren’t on the board and this is exactly how it is filed. Distribute enough to pay the taxes and reinvest the rest or pay down debt. Pass-through entities pay tax at the shareholder level.

                • JJFIII says:

                  If only there was a way NOT to have that happen? Maybe don’t be part of an S corp. The entire PURPOSE of an S corp is taxes. By the way, of these 400 people, how many are S corps?

                  • Bsamm09 says:

                    I’d bet that a lot of people in the top 400 are shareholders in an S-Corp. That’s how a lot of businesses start then convert to a C-Corp later. Then go public.

                    It doesn’t matter if you are an S-Corp or a partnership, if you reinvest your money back into your business and don’t pay it out, you are still liable for the tax on the net income. That’s the nature of the beast. A C-Corp pays the tax itself and isn’t too much different except that the money that is distributed is then taxed again if it is a dividend.

                    I was just pointing out a real world example of how having a lot of income on your personal return doesn’t mean that you actually have ever received that income. In these guys case, I bet there is a lot of this type of thing but I also bet they have a ton of distributions from partnerships that are tax-free too.

  3. eturowski says:

    A lot of income minus 25% still equals a lot of income. This is probably no consolation to the loads of “little people” who lost jobs last year.

  4. wade says:

    If their income dropped 25%, then we need to raise their taxes 33% so they keep paying their fair share!!!

    • pythonspam says:

      I pay more than 20.9% of my income to the IRS. Why should my wages, interest, and dividends be taxed at a different rate than investment manager’s “capital gains” income? It’s the same money that we could invest in businesses and job creation, we just don’t have a lobbyiest to get those exemptions that the top 400 do.

      • TasteyCat says:

        While we’re being fair, why should I pay as much as I do, with no deductions, while nearly half the country pays no income taxes at all, with their votes being bought using money of those who do pay taxes.

        • Lt. Coke says:

          Probably because those people can barely afford to eat as is. “Fuck you, I got mine” all you want, but I’m hearing none of it until you throw away all of your money and try living at an income that allows you to be INCOME tax (other taxes still apply. Own property? Taxes. Need gas to get to work? Taxes. Hungry? Depending on your state, taxes) free. If you have any humanity at all, you won’t be as eager to screw these people over. Many of them can’t vote anyway, they’re too busy working for a living and if they request time off to vote, they will lose their jobs and starve to death on the streets inside a few weeks, because savings accounts are fantasies for people at this income level.

          But hey, you got yours, and at that point, nobody else matters.

          • TasteyCat says:

            So fair means that only certain people should have their taxes raised, while others should continue to pay nothing. Good to know. I’d think $16 trillion in debt would be a red flag, or perhaps somebody would learn something from Greece. But apparently we still have more of other people’s money to go around.

            People who don’t pay income taxes may not make much, but they utilize the vast majority of government services, with a philosophy focused on hand outs, rather than hand ups. They should contribute toward the cost of their own welfare, whether it’s a burden or not. Even if there is an argument against everyone paying the same rate, everyone should pay something.

            • SabreDC says:

              That’s how a civilized society works.

            • stinerman says:

              If $16,000,000,000,000 in debt was a big deal, the interest rates on our debt would be high (much like they are in Greece). Our 10-year bonds just hit a record low of something like 1.5%, which makes real interest rates *negative*. Investors are falling over themselves to buy our debt only to take a loss.

            • incident_man says:

              Typical argument from a member of the “I don’t want to pay for something I don’t directly benefit from,” crowd. Ever try living at an income level of those “who don’t pay taxes at all?” I have and it’s f’n depressing. Forget the “luxuries”, not even enough money for the essentials! I did everything I could to get out of it and ultimately succeeded. Where I succeeded, though, there are many more who do not. I don’t make six figures a year (not even close), but I make enough to take care of my and my family’s needs and I don’t bitch about having to pay more in taxes than someone who makes less than I do. In fact, I donate to charities that I can afford to BECAUSE I was once in a far more precarious situation financially relatively recently, so the memory is FRESH in my mind. If it means that I have to go without a latte a day, so that someone less fortunate can feed their family, I’m OK with that. I don’t NEED the damn latte anyway.

              As another poster said, taxes are a part of a civilised society and it’s only fair to ask those who can afford to pay more to do so for the good of society.

              My belief is this: “From each according to their means, to each according to their needs.”

  5. Jules Noctambule says:

    Aw, those poor little rich folks. My heart bleeds for their suffering.

    • dush says:

      Yeah they won’t be buying as much or employing as many. Sad days for them.

      • Loias supports harsher punishments against corporations says:

        How many people are actually employed using their personal income? This isn’t a business, this is their own income.

        • Auron says:

          Exactly that. That is why the argument that taxing the rich less leads to more jobs fails. I guarantee that the executives of a company DO NOT base hiring/layoff decisions on their personal income. After all, if a person is high enough in a company to make say a 7 figure salary, I doubt that person has any say in hiring/firing decisions, unless they work in the HR dept. The amount of taxes they pay on that 7 figure income, again unless they work in the HR dept, are going to have ZERO affect on the number of people hired or fired. But of course, we need to make sure the “job creators” pay fewer taxes for the slimmest of slimmest hopes that they will, in fact, use that extra money to create jobs.

          • dush says:

            Yeah, let’s make it less worth while for those rich guys to buy a jet. Stupid rich guys.
            That’ll teach those dumb jet manufacturers and all their employees a lesson they won’t forget.

            • Auron says:

              My point isn’t about the rich helping others stay employed. My point was that the executives of Company A DO NOT make hiring/firing decisions specifically for Company A based on their personal income. Yes, they help people of Company B, Company C, etc stay employed by buying big ticket items, but my post dealt specifically with Company A.

              • StarKillerX says:

                Actually company A may well get much of it’s operating capital from a person’s personal assets.

                Do you think that after they are done shopping that they stuff the rest of the money in their mattress or something? Normally most will be invested in either the market or directly into businesses with some in banks, which then have it available for home, small business and other loans.

                When I started working for this company it was 100% family owned and upgrades, expansions and any other expenditures that weren’t directly required to make our products came out of the profits which was money they owners could have taken as profit.

                • Auron says:

                  Again, I need to be more clear. I am specifically talking about the Fortune 500/100 type companies, where the executives are compensated in the upper 10s-100s of millions/low billions. I guarantee the executives of those companies DO NOT use their personal money to run the business, since they are only responsible for increasing the value of the company stock and therefore making themselves richer in the process. Someone in that position is NOT going to make decisions on how many people to hire or fire based on their personal income, whether or not they are paying more in taxes on their personal income.

            • Talmonis says:

              You mean that stuff that they almost exclusively import from other countries, which means not a dime is spent in the local economy?

              • frank64 says:

                Well we all do that! I am sure much of what they spend is domestic. If not shipping and installation fees, sales fees, commissions. Most things are not bought direct from overseas.

          • CrazyEyed says:

            Correct, but lowering taxes to make the cost of running a business more affordable WILL lead to more disposable income the business can use to hire more poeple. If people are going to argue for or against rich/wealthy people paying taxes then they better be very specific as to the invidual or entity they are arguing for.

            • Auron says:

              Let’s look at Best Buy. The reason they are closing stores, using smaller footprint stores, and laying off employees is solely to increase executive compensation and value of stock. Who benefits from the increased stock price? I can guarantee it isn’t going to be the cashier at the local B&M store or the person pulling orders at a warehouse for internet orders. Best Buy states that they are in financial crisis, yet had 50.3B in revenue for FY2011 and a profit of 1.2B in FY2011. Brian Dunn is getting a 6.6 million severance package. I’m curious how many non-management part-time store level employees that 6.6 million could sustain for even 1 year. Doing some quick math, lets say a part timer makes $10/hr and works 30 hrs/week. That 6.6 million would sustain 423 employees for 1 year.

              • Dagny Taggart says:

                Who benefits from an increased stock price? How about your 401(k)? How about your kids’ college fund? How about your parent’s pension fund? How about the IRAs of a lot of average, hard-working folks?

                It’s not just rich people who invest in the stock market.

                • RvLeshrac says:

                  You’re ignoring the fact that 401k firms have absolutely no responsibility to the plan holder, and thus dump all their poor-performing stocks into the 401k. When a stock performs exceptionally, it is moved from a 401k to a different one of the firm’s assets, until such time as the 401k reporting becomes due, when the high-performing assets are moved back into the 401k to “load” it.

                  Insofar as IRAs and other investment vehicles are concerned, they’ve been taking a beating for quite some time, and ‘John “John-boy” McJohnson the XIVth’ doesn’t give a shit. He’s got a $30million cash severance package.

                • Jevia says:

                  I’d rather have some cash in my pocket right now, to buy, you know food and clothes that I can use now, rather than maybe use in another 30 years, if I can even afford to ever retire.

              • frank64 says:

                “The reason they are closing stores, using smaller footprint stores, and laying off employees is solely to increase executive compensation and value of stock”

                Where did you get this “info”? Couldn’t it be lack of demand due to competition and the need to reduce costs to compete? Hopefully they are trying to increase the value to shareholders, but where did they say they were were doing it to increase executive compensation?

                • RvLeshrac says:

                  There are no competitors to Best Buy that haven’t existed for years. Best Buy’s competition is stores such as H.H. Gregg and Wal-Mart, not stores like Amazon or Newegg.

                  The “Best Buy Problem” is that they eliminated commissioned sales positions, in turn reducing staff, in order to increase executive compensation, without regard for the fact that this would decrease sales.

                  Then, of course, average pay for non-executive positions *decreases* year-over-year, while executive compensation *increases* year-over-year, and they wonder why no one is buying products?

                  • frank64 says:

                    First of all Amazon is real formidable competitor.Inernet sales are changing retail and a good company will respond, for survival. Second, executive pay apparently had been declining, the whole subject of the article. In your and others world every change a company makes is solely to increase executive pay, there are no other reasons, it all goes to them? No, it is negative spin/snark but it does not hold up to any scrutiny.

            • Kate says:

              Except a business will not hire people unless there is a demand for product and demand for product requires the lower income people to have disposable income, not less.

              And then a business will hire more people no matter how much ‘disposable income they have’ because there is an opportunity to make more profit.

              I can’t imagine why honest person with the least experience running a business would think that lowering taxes on a business would encourage them to hire more people other than extremely marginally.

              • frank64 says:

                Many businesses are marginal right now.

                Lower taxes mean more cash. What do you do with the cash, invest it for growth or pay it out in divs? Investing for growth might very well meaning hiring for a new product, buying new equipment or more spend on marketing. It could be payouts to shareholders, and that could get spent too.

        • dush says:

          You don’t have to run a business to employ people or hire people. You don’t even have to be rich. Wealthy people have a lot more property and stuff to maintain and deal with. People are employed to take care of those things. A month or two or three less of calling on those people here or there and that’s a lot of income to those service people that’s gone.

          • frank64 says:

            It doesn’t even have to be about hiring people directly. It is also about just spending. Going out to eat, buying cars, remodeling, deciding to have a party, or a bigger party. Just the normal economy at work. Of course that means jobs.

            Yes, they may have to cut back less than us. A 25% reduction in my income means I am spending $0.00 on many things such as going out to eat.

    • wackydan says:

      That means we are seeing a combined $57 BILLION less in taxable income from these 400 richest…. Going by a recent CNN article that puts their average tax load (federal) at roughly 19%, that means we are collecting $10.2 BILLION less from these 400 richest than we were before the bubble burst.

      Just a bit of perspective there.

  6. That guy. says:

    I guess we will be seeing a drop in sales for Restoration Hardware patio sets.

  7. Vox Republica says:

    That’s average income–in 2009. Economy was contractile, companies weren’t as profitable, etc. etc. Wait until 2014 when they release the 2011 numbers.

  8. CrazyEyed says:

    Sorry kids, your only getting Beamers instead of the Ferrari Enzo.

  9. TheMansfieldMauler says:

    Hooray! It’s working! We’re all getting more equal!

    • frank64 says:

      But we didn’t make any more…… in fact we made less too…..who cares they made less, that’s all I care about! Yippee.

  10. SavijMuhdrox says:

    Is it possible that the richest 400 tax-filers are now HIDING MORE of their income, rather than playing fair and paying more taxes? just a thought..

    • halcyon22 says:

      My thought too.

    • frank64 says:

      In 2009 there wasn’t any more incentive to “hide” income as compared to the previous years. There may have been some breaks that they took advantage of, but this would have been stimulus incentives. Some of these such as bonus depreciation means they will be paying more income in the future. They just allowed future depreciation to be deducted earlier.

      The real reason in 2009 was the recession.

    • Bsamm09 says:

      I’d doubt it. With the FBAR and other increased international scrutiny, foreign financial institutions are not letting as many or a lot of times any Americans open up accounts. I have a few clients with international businesses who have been having a harder time opening up business accounts for their foreign divisions.

      They don’t want the US messing up their private banking. Better to get rid of the US clients and allow greater secrecy than to have the non-US clients worry about what the US gov’t could demand of their banks.

      Last summer, I did a lot of work for clients entering the voluntary disclosure program for foreign accounts. The penalties are huge and really not worth the hassle and not great returns they offer even net of tax. The only benefit is from estate taxes but there are many ways to legally transfer money and keep the overall estate tax down. (Also, jail time/lawyer fees/CPA fees are not worth the hassle too.)

      Also, when the economy is going down, it can be a good time to distribute assets out of a corporation and realize some of you losses too. If you held a lot of stock that tanked in 2009 and sold it you could have a lot of capital losses that can shield a lot the gains you have once it came back.

      • CrazyEyed says:

        Exactly. I work in remediation at HSBC and all Business Accounts are going through a thorough review to fact check where money is coming from and going to to maintain a business relationship. In addition, all signers and controlling parties go through an extensive background check to assess risk. Obviously the foriegn companies go through some additional procedures and verification. Just wanted to point that out for all those who want to turn this into a left vs right, big company vs poor person issue.

      • Kate says:

        Well there is the issue that the money has to be somewhere. We can’t all be losing money at the same time, so where is the profit all going now?

        • frank64 says:

          Much of the money people had was in assets that were deflating. We were ALL losing money. Houses, stocks and bonds. Many business struggled and laid off people. Bad for both.

          Note: ALL is a general term, there were individual person and companies that did fine.
          (internet people like to look for exceptions and indicate that the exception makes you wrong.)

    • StarKillerX says:

      I’m sure that’s it, and if not let’s pretend it is because we need to demonize the rich no matter what!

      • Kate says:

        No, he pointed out the possibility which is what an honest person would do.

        Surely you are smart enough to see that reported income is not the same as income.

    • Costner says:

      I won’t say they are hiding it, but when tax rates are reduced you typically see a lot of income flowing the first year or two for fear the low tax rates won’t last. So the ultra-wealthy are finally realizing their gains from investments or tax shelters etc. This is why when Congress enacts significant tax cuts we typically see revenue increases the first few years… after which they taper off (which some might think indicates people have “less” money, but in reality it was just manipulated by the surge of reported income).

      So when some politicians brag that lowering taxes actually increases revenue, be somewhat skeptical. What is true for one or two years will likely not be the case in five or ten. Since we have a President who has been spending a lot of time suggesting we need to tax the rich more (a theme he campaigned on), I would guess the ultra-rich were doing their best to get their money out before tax rates when up. I’d suggest you will see the reported incomes start to taper off for the next few tax years since we expect most of the Bush tax cuts to start expiring.

  11. oldwiz65 says:

    Clear evidence that we need yet more tax cuts for the super rich. How are they ever to survive?

  12. JaundiceJames says:

    Screw ’em. They weren’t doing anything good with it anyway.

  13. comatose says:

    This proves Obama’s a socialist!!!11! /sarcasm

  14. Buckus says:

    I would bet money that a bunch of that “drop” in income is the super-rich squirreling away money in unreachable locales in anticipation of tax rates going up.

    • frank64 says:

      That would be wrong, they would recognize it now, so they could pay the tax at the current lower rate. Some people are making those types of decision in retirement account now. They are not deferring their income so they won’t have to pay the higher tax later.

      • Evil_Otto would rather pay taxes than make someone else rich says:

        Or, they’re hiding their money away so they’ll NEVER pay taxes on it… If we have a tax lawyer/accountant in the house, is there any particular reason they would do that more in 2009 as opposed to previous years?

        • Bsamm09 says:

          2009 was the beginning of the UBS inquires. To take enough money out of the country to lower your income by 25% would be a lot. It pretty much has to be capital gain/interest/income since that’s the only way removing the cash would lower your income. Let’s say you get a return of 10% and have an income of $1,000,000. To lower your income by 25% ($250,000), you would have to sell off and transfer $2,500,000 out of the country.

          For them, it would be $862,000,000 each. Not likely.

          What was really happening in 2008 was the stock market dropped 30% from 12,000 to about 8,500 before it bottomed out in March around 6,500. The most plausible explanation is the people managing these guys money, were harvesting capital losses by selling stock.

          Also, since the economy is going downhill, I bet they were getting decent losses from their K1s (as well as getting out of some old PTPs thereby releasing some suspended losses) and a variety of other ways a rich person could get §1231 and §1244 losses.

  15. Talmonis says:

    Oh no. What ever shall we do? Truly this is the greatest tragedy to befall these United States. When an obscenely rich man cannot buy 3 yachts in a single year, and instead has to settle for (brace yourselves, those of you with weak hearts may be harmed) two yachts and 6 speed boats, we all lose. Certainly, we all must begin a stalwart vigil, with candles and perhaps a silent parade in mourning, for the loss of these yachts… /willywonkaface

    …Or, instead of that, how about we cause a little mayhem. Squeeze them a bit more. Let THEM feel the pinch that they want to inflict on us. Let Rome burn. /visagothface

  16. aleck says:

    Ok, that’s 2009. Remember? Sorry for bringing up this memory. Lots of people had a bad year. And since top earners most likely get their income from investments, it was a particularly bad year. Plus, all those Wall St. bonuses that evaporated. So, why is this big news?

  17. bosozoku says:

    Even if I was #401, I would still give it all away for just a little more.

  18. Kate says:

    Um, no. What was reported dropped. Nothing can be assumed about what income actually was.

  19. voogru says:

    And here’s the real reason why a soak the rich policy is bad, because the income of the rich isn’t always consistent.

    Someone who made five million years ago might still be a millionaire today, but their income went to peanuts.

    • HomerSimpson says:

      Darn right! Probably out begging on the street with a tin cup as we speak!

      • voogru says:

        No, not particularly.

        They could still be quite well off, but making 1/10th of what they were before. When you have your tax policy in such a way where you are dependant on incomes of those who are vastly erratic, you’re going to have problems.

  20. HogwartsProfessor says:

    Somebody call the waaaaaambulance.

  21. Bad_Brad says:

    This is actually a good cautionary tax policy tale. We ought not rely too much on those with very high incomes to fund our government. Their incomes are much more volatile than everyone else’s. I’m not asking that people pity them, but I am saying as a practical matter, governments should have more diverse revenue streams.

  22. ECA says:

    That the money being Gained/reported is like searching for a needle in a haystack..
    Many RICh people HIRE others to hide/dispose/find all the loop holes they can..
    Many rich people have an IRS statement thick enough to become a Book..

    The IRS has few resources/ability to track ALL the info supplied in a BOOK of information.
    If the IRS could track all the information needed to SHOW/PROVE/ANALYZE the info supplied, they could track any person in the USA , they could tell you Every penny in every bank..

    You could track your money MUCH easier then the IRS can track every Dollar(not pennies) with a little basic book keeping.

  23. RvLeshrac says:

    And the average income among *everyone else in the entire fucking country* has been dropping substantially more over the past 30 years. You can’t even consider this a “market correction,” because if it was, it would be 2-3x as large a decrease.

  24. JJFIII says:

    The funny part of this study is that the data is over 2 years old. Yes in 2009 rich people lost money. Did you see the stock market in early 2009. How about you look at the 2011 or even 2010 numbers. The graph will be skyrocketing in the same way the stock market has gone (up over 50 per cent).
    The right wing will use this as evidence that the super rich are losing under Obama, BUT the data is all GWB policy driven.

  25. dwtomek says:

    At least the mega wealthy are having to tighten their belts as well. Admittedly, those belts are attached to a Veryon as opposed to a pair of dungarees. Still, belts are being tightened and that’s what is important.