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.
Which is exactly where we are today. The current definition of poverty would be a joke if it wasn't so fraudulent and evil.
You might be on to something. My nephew and his wife have adopted 2 black children from Africa. the oldest one is about 14 now and he is a brilliant student and a fantastic athlete. The younger one is headed that way too.
Being poor is just a lack of assets at the moment. Poverty on the other hand is a matter of self worth. I have been poor,but I’ve never been in poverty. I simply refuse to except that.
Africans who come to this country want nothing to do with “African-Americans”.
I have several friends from Nigeria that confirm this.
That’s not limited to Dallas.
Even FDR knew it.
From the 1935 SOTU address:
“A large proportion of these unemployed and their dependents have been forced on the relief rolls. The burden on the Federal Government has grown with great rapidity. We have here a human as well as an economic problem. When humane considerations are concerned, Americans give them precedence. The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is in violation of the traditions of America. Work must be found for able-bodied but destitute workers.
The Federal Government must and shall quit this business of relief.”
Rush said it best, some People work for a Living and some people Vote for a Living.
While I am not 4-for-4 like you, growing up in the lower end financially ensured that I knew what I did NOT want to do, which was a great motivator for me to do what needed to be done (college education). While our family was always struggling in the early years of my youth, my upbringing was well grounded in Christianity, hard work, education, etc. Looking back, I owe everything I am today to those early years.
Poor is a practiced decision.
Poor people have poor habits
“The rich get richer” doesn’t apply to the top 1%. It applies to the top 0.01%.
“Being poor is a state of mind.”
Bingo. The more I help the poor, the more I see it’s a matter of mindset.
Welfare state doesn’t help, making change of mindset very hard.
Because they`re lazy and irresponsible.
While it sounds unlikely, often the poor are poor because they want to be poor. Not directly, as such, of course. But wealth accumulation doesn’t really appeal to a lot of people who put their priorities elsewhere.
Artists, writers, musicians and athletes know that they have to work very hard, but with no guarantees at all for financial success, which comes only to a very talented few. Yet they still do so, even if the result is personal poverty.
It’s their choice.
However, the flip side of this should not be forgotten: that there are many people in the world who are just incapable of grasping that others DO NOT want to be just like them. It is seemingly beyond their ken.
I saw an example of this with a green police officer who was filled to the brim with great ideas and help to a young homeless man, who showed no interest at all in it or him. The young officer saw that the young homeless man had great potential (which is true, in that the homeless guy eventually went to Stanford and graduated at the top of his class.) Eventually the young officer was almost stalking the young homeless man, more than anything desperate to know why anyone would *prefer* to be homeless.
Finally the homeless guy sought out a senior police officer, explained the situation to him, and suggested that the young cop needed some “reality counseling”, with which the older officer agreed.
Many people are terribly intimidated by the idea of homelessness, which they see as a personal threat to their well being in some way. And this can turn into a deep and abiding hatred of the homeless. Again, the problem is with them, not the homeless people.
We don’t have much money but we’re not poor
My paternal grandmother always said you can be poor as a church mouse and still get by, but there’s no excuse for wallowing in filth. Soap is cheap and your labors are free to you. It’s the desire to hold things together, to not descend into hopelessness that is the difference, not money.
They are idiots that live on credit!
“· 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).”
Bold faced lie. Age has nothing to do with tax rates and anyone making $30k does not face a 41.9 tax rate. The tax rate on $30k is 15%.
If you “lose” a government welfare benefit because you earn too much money, that’s a tax?
Sounds like something Chief Justice John Roberts dreamed up.
[ Poor people have poor habits ]
Especially in THIS country...
I other countries that are hell holes there is plenty of blame to go around, in THIS country, not so much.
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.