Wednesday, October 21, 2009

A Writer's Life

It turns out that F. Scott Fitzgerald's tax returns were never thrown out. An analysis by William J Quirk shows that Fitzgerald was not the irresponsible spendthrift of legend, but a very careful and reliable earner, who carefully documented his income and expenses. (Though, like all of us, he did sometimes wonder where the money went.)

Because our profession is, essentially, a gamble, success in the writing field tends to go to the smarter gamblers among us--- though of course it's possible for someone to succeed through dumb luck. Fitzgerald was a pretty smart gambler. He wrote very profitable short stories in order to supported his novels, few of which made much money (in my case I write novels to support my short story habit), but the upshot was that Fitzgerald had to juggle art and commerce in much the same way that all of us do.

And, of course, the tax returns are a glimpse into a style of life that exists now for only a very few.

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.

Fitzgerald, from the beginning, was recognized as a major American writer. During the Hollywood years, he was never paid less than $1,000 a week. Warner Bros., in the 1940s, paid William Faulkner $300 a week. From June 1937 to December 1938, Fitzgerald earned $85,000 at mgm—more than $1,100 per week . . .

Fitzgerald’s annual income was remarkably consistent, although some years were better (1938, $58,783) and some worse (1931, $9,765). But most years were pretty close to $24,000. Despite his high income, he was not able to save or, as he said, “amass capital.” Fitzgerald’s only income came from his writing. Zelda brought no capital into the marriage, and he had none. Zelda became ill in 1929 when they were both very young—she 29, and he 33. In 1930–31, a 15-month stay for Zelda in a sanatorium on Lake Geneva cost $13,000. Zelda stayed ill the rest of Fitzgerald’s life. He felt obliged to provide the best care, but because of doctor and sanatorium bills, he lost hope of controlling his finances. Friends advised Fitzgerald to economize on Zelda’s medical expenses. He wrote to Max Perkins, his legendary editor at Scribner, on October 16, 1936: “Such stray ideas as sending my daughter to a public school, putting my wife in a public insane asylum, have been proposed to me by intimate friends, but it would break something in me that would shatter the very delicate pencil end of a point of view.”

In 1936, he inherited $22,975 from his mother, but by that time his finances were lost past recall. When he died in December 1940, his estate was solvent but modest—around $35,000, mostly from an insurance policy. The tax appraisers considered the copyrights worthless. Today, even multiplying Fitzgerald’s estate by 30, it would not require an estate tax return.



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1 Comments:

Blogger Ken Houghton said...

Didn't he have royalties from "The Star-Spangled Banner"? (Yes, I realise it was family money, but direct descendancy has to count for something.)

8:15 PM  

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