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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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October 18, 2010

So, How Well Does Winning a Nobel Set You Up?

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Posted by Derek

Financially, maybe not as well as you'd think. Ask Martin Chalfie, one of the fluorescent-protein Chemistry prize winners from 2008. . .

Comments (26) + TrackBacks (0) | Category: General Scientific News


COMMENTS

1. coprolite on October 18, 2010 8:49 AM writes...

The headline of that article is kind of rude, I don't think he's whining, he answered the question honestly.

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2. CurryWorks on October 18, 2010 8:58 AM writes...

Richard Feynman used his nobel prize money to buy a beach house in California. (According to his Biography)

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3. Wavefunction on October 18, 2010 9:22 AM writes...

Interesting that it was a Republican President who started taxing the prize.

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4. Capek on October 18, 2010 9:43 AM writes...

I agree, it sounded like humorous chuckling, not whining. Now, if you want whining, there is always the example of Stanley Prusiner:

"I am going to use it to pay my taxes. This must be the only country in the world that taxes prize money."

Of course, even the full untaxed prize may not be enough to get you a decent beach house in San Francisco anymore.

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5. Scott on October 18, 2010 10:05 AM writes...

The lion's share of the monetary benefit from the Nobel comes from the follow-on business. Nobel laureates tend to win a lot of other prizes and honorary degrees, get a lot of speaking engagements and book contracts, and, if still active, find it much easier to win grants than before.

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6. SP on October 18, 2010 10:14 AM writes...

Scott scooped me- I guess I won't win the Nobel prize in blog commenting. But I was going to say the same thing- it's silly to focus on the amount of the prize itself as opposed to what else you can do with the recognition. It's like saying that the president only makes $1.6M per term, after taxes that's just enough to send his kids to college!

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7. Anonymous on October 18, 2010 10:14 AM writes...

Well you shouldn't give that article any credit anyways, it was written by a blogger (ie; someone with no journalistic credentials whatsoever) Get that article into a newspaper or a magazine, THEN we got something!

Of course, even the full untaxed prize may not be enough to get you a decent beach house in San Francisco anymore.

A single recipient could. If there's splitting at all, then probably not. Isn't the median home price well above $500K?

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8. newnickname on October 18, 2010 10:15 AM writes...

Don't forget the gold medal. According to Wikipedia, the medals average around 175 grams ~ 5.6 troy ounces; x $1350 per ounce = $7500. Wow. That would barely pay for his daughter's textbooks.

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9. Dana on October 18, 2010 10:20 AM writes...

@Wavefunction

Congress probably passed that law, not Reagan. Congress may very well have had a Democratic majority at that time.

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10. hell to the chief on October 18, 2010 10:57 AM writes...

If you are in this business for the money, you are in the wrong business. It is more of a calling. Nobel Laureates enjoy the glory although the several I have met have been somewhat embarrased by the attention (and almost certainly did not get into the business looking for that either!).

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11. John Thacker on October 18, 2010 11:25 AM writes...

The change was part of the general Tax Reform that eliminated a bunch of special interest deductions in exchange for lowering rates.

Of course, as we all know, all deductions are evil except for the ones that we ourselves qualify for. Why *should* special prize money be exempted from taxes that everyone else has to pay?

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12. John Thacker on October 18, 2010 11:30 AM writes...

In any year, the solid majority of "the rich" who make over $250,000 that year are people who won't make that much in any of the surrounding years. One common example is ordinary employees granted stock options who execute them all once they vest.

So this complaint about the prizes is the common one from people who face high marginal tax rates in one year even though they don't usually make anywhere near that much in other years. "Why am I being taxed this year like I'm rich, I'm not really rich, I just had one good year that won't be repeated?"

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13. Anonymous on October 18, 2010 11:47 AM writes...

Income averaging was also one of those fancy tax avoidance deductions that went away in the 1980s.

What low tax rates? My wife's income will be taxed at 66% in 2011 - 40% feds; 11% state; 7% SS/MC; 8% AMT; and sales tax equaling 4% (10% of the remaining post tax money). She will see $330 of her next years $1K raise. Remember the marriage tax? It is back!

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14. John David Galt on October 18, 2010 11:48 AM writes...

Remember that the Nobel prizes are not awarded by scientists, but by a committee of Swedish politicians -- who have discredited themselves and their award by handing out unearned ones to Gore, the IPCC, and now Krugman and Obama.

Maybe the remaining uncorrupt institutions of the science community (if there are any) should consider creating a new award to replace the Nobel.

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15. Anonymous on October 18, 2010 1:00 PM writes...

@14 "Remember that the Nobel prizes are not awarded by scientists, but by a committee of Swedish politicians..."

Nope, that's wrong. The medicine prize is voted on by scientists mainly from the Karolinska. I'm pretty sure chemistry and physics are determined the same way.

Shocked to see that someone who calls himself "John David Galt" would be completely ignorant of the facts.

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16. Anonymous on October 18, 2010 1:14 PM writes...

Chemistry and physics are determined by scientists from the Royal Swedish Academy of Science, medicine by scientists from the Karolinska.

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17. road on October 18, 2010 1:46 PM writes...

@14 "Remember that the Nobel prizes are not awarded by scientists, but by a committee of Swedish politicians..."

The Peace prize (Gore, Obama, IPCC) is awarded by Norwegians, not Swedes.

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18. MLBpitcher_and_MedicinalChemist on October 18, 2010 3:00 PM writes...

Chemists aren't set for life, but I am sure a Major League Pitcher who is currently has a four-year $60 million contract from the Atlanta Braves is doing well despite the tax regime.

If you win the Nobel Prize, people will forget you anyway. If you win the Cy Young, you will be forgotten, but more slowly. I bet more people remember Tim Lincecum (NL Cy Young winner 2008-09) than Jack Szostak, Andrew Fire, or Craig Mellow.

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19. SP on October 18, 2010 3:00 PM writes...

13 is a lie, there is no 40% tax bracket even if we return to Clinton era rates (the horror!) Furthermore, if you're in the top bracket you are well beyond paying full SS on all of your income.

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20. MLBpitcher_and_MedicinalChemist on October 18, 2010 3:05 PM writes...

Another note, Douglas Prasher who was involved in discovering the GFP, but didn't win the Nobel Prize was driving a bus for a car dealership in Alabama.

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21. DCRogers on October 18, 2010 3:12 PM writes...

@13

If you're paying top fed rate of 35%, then there is no AMT. You only pay AMT if your deductions lower the rate below 28%.

http://en.wikipedia.org/wiki/Alternative_Minimum_Tax

You better get a new tax advisor; or, if you've been doing the taxes yourself, get one and ask for a refund.

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22. p on October 18, 2010 4:15 PM writes...

Perhaps more relevant to this audience, that 1986 tax act also made graduate stipends taxable income.


A few friends of mine got together in Lafayette Park at an ACS meeting and "protested" the 1986 tax reform. Mostly that involved drinking, yelling and laughing. Which made us fairly inconspicuous in Lafayette Park.

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23. SP on October 18, 2010 4:27 PM writes...

Even better, in the late 90s the Gingrich Congress wanted to make the tuition reimbursement part of stipends taxable, on top of the salary part. Depending on how much salary you were getting and how much tuition was, that meant you could be owing more in taxes than you were being paid. Fortunately the AAAS headed that one off.

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24. dearieme on October 18, 2010 4:49 PM writes...

An acquaintance said ruefully that he paid about 50% of his prize in US taxes but as he was a US resident but not a US citizen he didn't even get invited to the champagne reception at the US Embassy in Stockholm.

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25. Morten G on October 19, 2010 9:24 AM writes...

But what if he hadn't won!? Then his daughter wouldn't have been able to go to college!

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26. Jonadab the Unsightly One on October 25, 2010 6:40 AM writes...

I'm with #5 and #6 on this. The actual prize money is the least part of the thing. The Nobel is arguably the most prestigious award in existence, highly regarded not just within the fields it addresses but by the general public as well (unlike, say, the Fields medal, which nobody in the general population has ever heard of).

Being a Nobel prize recipient opens doors. You can get speaking engagements without trying. If you write a book, a publisher will snap it up even if it's drivel. If you write a halfway decent book, or hire a really good editor to basically (re)write it for you, you can build an entire career as an author. Even if you don't want to speak or write books, you're still never going to have trouble finding work again. You could probably even get elected to public office, if you were so inclined.

As for the prize money, I actually didn't realize it was so much (1.4 million, that's quite a chunk of change), but even so, the money is still not the main point of the thing nor the most important benefit of being selected.

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