Posted on 01/13/2008 12:53:55 PM PST by Dan Evans
The L.A. Times editorialized in December:
If tranquillity is best assured by “a more equal distribution” of the nation’s wealth, we have much to fear. Our schools are faltering; our healthcare system leaves millions without access to doctors. Many are homeless or face the loss of homes. Some seethe at illegal immigrants who compete with Americans for jobs. In our America, 60 million people survive on $7 a day.
Annie Jacobsen was skeptical of that number, and wrote a fascinating piece about where this statistic came from. She notes that, if you accept this number, it means that fully 60 million live on less than $2,555 a year — even though the U.S. Census Bureau says only 37 million people live in poverty.
So, 23 million live on less than $2,555 a year . . . but aren’t in poverty?
(Excerpt) Read more at patterico.com ...
Another article on the study was posted earlier but I have found the methodology of the original source so that we may properly dissect this ugly toad.
David Cay Johnston came up the the “60 million living on 7 dollars a day” figure. Here is his analysis:
“Way down in the 15th paragraph I reported that the bottom fifth reported on their tax returns incomes of $11,166 or less and that their average income was $5,743. These are my calculations, but you can do from the same IRS tables, dividing income by taxpayers.
“You can see the first number and calculate the second from data going back many years (NOT adjusted for inflation) posted by the Tax Foundation, a group that seeks lower tax burdens, at taxfoundation.org/taxdata/show/250.html
“Since the bottom half averaged less than $15,000, it should not surprise that the bottom fifth averaged less than $6,000 of income, as reported on tax returns.
“So the $7 per day figure comes right out of the IRS tables so you can do your own math.”
http://pajamasmedia.com/2008/01/who_says_60_million_americans.php
The basis of Johnston’s analysis is IRS data of reported income. The fallacy is the implication that reported taxable income is the same thing as the amount of money a person is “living on”. There are people who go for years with very little income, yet they may live on tens of thousands of dollers a year if they are drawing down on saved assets. People like this may be very wealthy. Such as:
- Rich people who leave their jobs to travel the world, take a sabbatical, or who are temporarily disabled and live off savings. The only income they need report is interest and investment income
- People who quit their jobs to start a new business that doesn't pay off for several years
- Idle rich who sponge off their parents or live off their inheritance
- Retired people who own their homes and are living off savings plus investment income
- Men or women who leave the workforce to care for elderly parents.
When these people file tax returns their income seems to be poverty level wages but they may be living in relative luxury.
If person chooses to work only part of the year, his IRS return may put him in the lower one-fifth category. Consider the following categories of people who file for income received for only a fraction of the year:
- Women who quit work to raise a family. If she leaves a $36,000 a year job in February her income is only $3,000 even though she lives with wealthy man.
- Aliens on temporary work permits employed for a few months who then return to their home country
- Wealthy people who quit their jobs and take most of the year to find a new one
Many people may have very small annual incomes yet have good lifestyles if they are partially dependent on others. For example:
- College students with part time jobs
- Teenagers with summer jobs who live with their parents
- Women with part-time jobs who live with men who support them (or vice versa)
All of these people would file tax returns that would put them in the lower one-fifth and yet none of them are necessarily in a state of poverty. But the figures indicate that they have minimal income.
Also, not all income is taxable so these groups may receive more than is reported. Social security, child support, subsidized housing, medicare benefits, food stamps and disability are not taxable income. Most of the people who rely on these payments could very well fall into this lower one-fifth category. The federal government pays out half a trillion in social security payments every year. A large part of that goes to people who report minimal income.
Even though Johnston acknowledges that these welfare benefits are not included in his calculations, the headline still comes with the same bogus implication, that 60 million people live on seven dollars a day. That simply isn’t true.
There are people who are truly in the low-income category but nowhere near the destitution of “living on seven dollars a day”. For example:
- Convicts in county, state and Federal prisons who file for income received the few months before or after their incarceration.
- Tax cheats in the underground economy who only report enough of their income to qualify for earned income benefits
- Servicemen stationed overseas who receive room and board from the military
- Partially employed welfare mothers living in subsidized housing and receiving assistance and child support.
Most of us have at one time or another been in at least one of the above situations I have mentioned and I would guess that most of us know several people in these categories.
This leftist lie that 60 million people are living on 7 dollars a day is being propagated to advance the notion that America needs to expand its “social safety net”. But the truth is, the best safety net is a person’s friends, family and private wealth.
This is the L.A. Times so this doesnt surprise me.
Another liberal socialist sob story.
Leftist can makeup whatever number they want to. They will rarely be challenged.
Doing the math, that means these people only get about $49 a week. They must only work 7 to 8 hours a week. I feel so sorry for them. NOT!!! What a load of crap.
IF EVERYTHING IS SO GRIM, WHY DO WE HAVE TO BUILD A WALL TO KEEP THE REST OF THE WORLD OUT???
That is an outright lie.
Yes, but in this study of IRS data, only those that made enough outside income that they need to report it. In other words, the 60 million people who "live on" 7 dollars a day do not include the poor, only the rich!
Wow ! 60 million people living on a pack of smokes and a lottery ticket.
When I went to school I lived on less that $1.00 a day!
My 19 year old college student files a separate tax form for his part time income, and it is low.
Trust me...the kid isn’t living in poverty by any means!!!
Don’t forget, they are the ones who created this mess and time and time again they blame it on the republicans and the rich, who are really the middle class in thier eyes. These are children who are trying to balance a check book.
Propaganda has its rewards in the eyes of the liberal masses.
Case in point - my son just called me from his college house, asking if I would buy him new blinds.
(I told him no.)
My 1st month’s pay in the Army in 1969 was about $79. Of course, they did give me room and board.
Why do most people who live on $7 a day have big screen TV’s and play lotto?
That would be the $64,000 question. Well, probably worth more nowadays, but I don’t know how much. Anyway, excellent point.
susie
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.