Posted on 04/19/2014 4:08:38 AM PDT by Kaslin
Have you ever wondered why poor people are poor? It's not as though there aren't plenty of role models around. Millions of people live highly successful, productive lives in this country. So why don't people at the bottom of the income ladder copy the behavior of those several rungs above them and better their lot in life?
As I wrote previously, the federal government's own pilot programs established conclusively from the very early days of the War on Poverty that the welfare state encourages people not to be married, not to work and not to invest in human capital.
This is Gene Steuerle before a House Ways and Means subcommittee:
The chart below shows a hypothetical example whereby a family (single parent and two children) can receive nearly $30,000 in government benefits with no household earnings, but only about $10,000 in government benefits with $35,000 in household earnings.
So if the mother earns, say, $35,000 she loses about two-thirds of that amount in lost welfare benefits, and that's not even counting what the government will take in income and payroll taxes.
Steuerle's chart shows what incentives look like at a point in time. But activities today affect benefits tomorrow. For example, working and earning wages produces Social Security benefits and perhaps a private pension at the time of retirement. What do the incentives look like when we look at the lifetime effects of earning wages today?
That question was addressed in a study for the National Center for Policy Analysis by Jagadeesh Gokhale, Laurence J. Kotlikoff and Alexi Sluchynsky (NBER version here.) The authors explicitly incorporate future Social Security benefits as well as current payroll taxes to calculate lifetime marginal tax rates. They conclude that:
· Americans at every income level face a lifetime marginal net tax rate greater than 50 percent.
· That is, for every dollar they earn, they will lose more than 50 cents in higher taxes and reduced transfer benefits.
Furthermore, the highest marginal net tax rates are not imposed on the highest-income families. They are imposed on those with the lowest earnings. For example:
· At two times the minimum wage ($42,800), working couples get to keep less than 30 cents out of each dollar they earn.
· At 1.5 times the minimum wage ($32,100), they get to keep less than 20 cents out of each dollar they earn.
· By contrast, a couple earning $200,000 a year gets to keep 44 cents.
In a follow up study, Kotlikoff and coauthor David S. Rapson calculate the effects of working more hours for people at different income levels. They conclude that effective marginal tax rates are generally and substantially higher for lower-income households than for high-income households.
· For 30-year-old couples earning $20,000 the marginal tax rate on an additional dollar earned is 42.5 percent; yet those earning $50,000 a year face a marginal tax rate of only 24.4 percent.
· At age 45, couples earning $30,000 a year face a higher marginal tax rate (41.9 percent) than do those earning $200,000 a year (35.9 percent).
· At age 60, couples earning $10,000 a year face a marginal tax rate of 50.9 percent, compared to a 43.2 percent marginal tax rate for those earning $200,000!
Moreover, single-parent households who qualify for more benefit programs than do couples face astonishingly high marginal tax rates beginning at lower incomes. For example:
· At age 30, a single parent earning $10,000 a year faces a 72.3 percent marginal tax rate on an additional dollar earned due to their loss of welfare benefits; this rate is substantially higher than the 36.9 percent tax rate on the single parent earning $200,000.
· At 45 years of age, a single parent earning $20,000 faces a marginal tax rate of 42.9 percent; higher than a single parent earning $200,000.
· A 60-year-old single parent earning $10,000 a year faces a 50.9 percent marginal tax rate, while those earning $200,000 face a rate of 43.2 percent.
There are numerous reasons for poverty. What comes to mind are the following:
-laziness
-low intelligence
-poor education system
-lack of moral character
-government handouts
-children being born outside of marriage
Actually, if the moral character issues were solved, the other problems would disappear.
That sounds a lot like my shiftless in-laws.
On the other hand, when my grandmother said, “Don’t get above your raising,” she meant, “Even though you got an education and moved away from the farm, you still have to follow the Commandments, be honest and loyal, and respect your elders.”
I believe that Benjamin Franklin once said ‘...make no one too comfortable in their poverty.’ Perhaps our current ‘rulers’ are wiser than he.
Because the government doesn’t give them enough money, silly question. /s
Bums LLC.
Exactly. In some races/cultures, poverty is generational. Yet in others, like Asians who came here with only the shirts on their backs, each generation is more successful than the last.
The best response would be "I'm not acting white, I'm emulating an African." African immigrants academically out-score and out-graduate native caucasians.
It's not race. It's culture. American black culture sucks.
“My CPA put it this way....”All I can tell you is that the rich are getting richer.””
It’s the dems economic policy they call “trickle up economics” and it means just what it says.
It’s a paradox.
The higher you raise taxes on the rich to provide goods and services for the poor, the rich will get richer and the poor will get poorer.
If the govt collects taxes then spends the money to pay for an ice cream cone for a poor man, the wealth doesn’t get transferred to the poor man getting the ice cream cone, he has an ice cream cone which is gone when he eats it.
The wealth gets transferred to the top, the man selling the ice cream cone.
Since LBJ’s “war on poverty” there has been, IIRC, around $20 trillion spent.
If that was a transfer of wealth to the poor as everyone wants to believe, then the poor would be rich, and they’re not.
The poor are poor for exactly the same reason the rich are rich. They both keep doing the things that make what they are.
Most all of us have been poor. Fresh out of college, living in a cheap apartment and scrimping on groceries, I was as poor or poorer than a welfare recipient. What I did do was work harder and smarter. What I didn’t do was drugs, alcohol, father children or commit crimes.
It’s a simple formula: Do the wrong thing = get a benefit; do the right thing = get no benefit and pay at the point of a gun for the benefits of people who do the wrong thing.
More often than not it is what people don't do that makes them who they are.
America became great because of what the Constitution prohibiting the government from doing. You can see what happens to America when government does what the Constitution forbids government from doing. It is not different for people. You can see the consequences of the life style choices people make.
The problems most people face in life are the result of the choices they made. Their problems begin when they take the decision to exchange what they want most for what they want now.
“African immigrants academically out-score and out-graduate native caucasians.”
You never met Somalians. When they get on the Welfare, they tend to stay there.
Many years ago, Carl Rowan, a black LIB columnist in the Washington Compost wrote an editorial entitled “acting white”. It talked to how many blacks deride others who work hard, go to school and generally act responsibly as “acting white”. His column was not well-received by the black and LIB readers.
The logic of that observation must be the following.
In order for the party of the rich to gain more votes, that party would assist as many Americans as possible to become richer.
Then this must also be true.
In order for the party of the poor to gain more votes, that party would assist as many Americans as possible to become poorer.
I hope your CPA exhibits greater knowledge and wisdom when preparing your return.
If you took the money from the rich and gave it to the poor, the rich would have it all back and the poor will still be poor within a matter of months.
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