Benjamin H. Harris and Melissa S. Kearney at Brookings:
A Dozen Facts about America’s Struggling Lower-Middle-Class, by Benjamin H. Harris and Melissa S. Kearney: This Hamilton Project policy paper provides a dozen facts on struggling lower-middle-class families focusing on two key challenges: food insecurity, and the low return to work for struggling lower-middle-class families who lose tax and transfer benefits as their earnings increase. These facts highlight the critical role of federal tax and transfer programs in providing income support to families struggling to remain out of poverty. ...
Here are the facts they discuss:
1. More than half of families in the United States earn $60,000 or less per year.
2. Nearly half of families in the United States live below 250 percent of the federal poverty level.
3. Struggling lower-middle-class families are almost equally headed by single parents and married couples.
4. Nearly one out of two families in the struggling lower-middle class is headed by an adult who has attended college.
5. Nearly one-third of struggling lower-middle-class families rely on income support from a government program.
6. Roughly 40 percent of children in the struggling lower-middle class experience food insecurity or obesity, or both.
7. More than one in five children faces food insecurity in thirty-seven states and the District of Columbia.
8. Nearly 90 percent of Supplemental Nutritional Assistance Program (SNAP) recipients live in a household with at least one child, one disabled individual, or one elderly individual.
9. America’s tax and transfer system expands the middle class.
10. Struggling lower-middle-class families depend on an array of tax and transfer benefits.
11. A low-income, single parent can face a marginal tax rate as high as 95 percent.
12. The highest marginal tax rates tend to fall on the struggling lower-middle class.
1. So what? A teenage girl has a baby: that's a "family." Whose fault is it that she's poor? The American taxpayers?
2. So what? Really. So what?
3. Half of "struggling lower-middle class families" (whatever that is) owe their struggles to disastrous personal choices.
4. It is amazing how far down the barrel you can go and find people who can claim to have "attended college" at some point in their lives. As though that were some sort of educational or personal accomplishment. "I took a Tai Chi class at the local community college." I attended college.
5. Only 1/3? I don't believe it. Does EITC count?
6. They eat too much or they eat too little. Shocking isn't it? The same could be said about everyone else, as well. 70% of the people in my bowling league experience food insecurity or obesity, or both. Mainly the latter.
7. Talk to their parents. They are the ones responsible for feeding them.
8. So what? What is the comparable number of households in the entire population that have "at least one child, one disabled individual, or one elderly individual." I have rarely lived in a household that didn't have at least one of these. Hell, now I AM one of these!
9. If you define "middle class" broadly enough. No one (other than a retireee) who relies on a Gub'mint check is middle class.
Dave, if you click the link and read the guy's explanation, you'll see that the way he's arriving at these "marginal tax rates" is by defining "marginal tax rate" in a very sophistic, misleading and disingenuous way....(which is no doubt what rube finds appealing about it.)
He's defining the reductions of government benefits as a tax increase, and then computing the percentage to get his "marginal tax rate"...
So for example:
Let's say a person qualified for a $9000 EIC, (Earned Income Credit)
Then they finally a better job, and their income goes up by 10K...Now they lose the 9K EIC....
This guy would claim that the person is paying a 90% "marginal tax rate"....
While this a completely bullshit way to define "marginal tax rate" (there's no actual "tax" involved in this process) it does touch upon a very real problem...
Namely how to make sure that benefits (EIC, food stamps, etc.) are not reduced at such a rate as to provide a disincentive for people obtain better employment. As a person's ability to support themselves improves, certainly they should face benefit reductions. But those reductions need to be calibrated in a way that still makes it attractive for the person to improve their private sector employment situation.
Last edited by Lord Jim on Sat Dec 07, 2013 4:51 pm, edited 1 time in total.
Lord Jim wrote:Dave, if you click the link and read the guy's explanation, you'll see that the way he's arriving at these "marginal tax rates" is by defining "marginal tax rate" in a very sophistic, misleading and disingenuous way...... " .
I clicked through for the explanation because the bare claim seemed improbable but it is in fact true.
The point he is making describes honestly the economic transition for someone who is at the upper limit of receiving the EITC, qualifying for Medicaid, &c. Someone interested in the concrete economic effects of social policy would attend to this fact and try to craft a solution which rewarded people in this situation for working more rather than punishing them for it.
The "marginal tax rate" in this case accurately describes the economic effect on those individuals. If each dollar more you earn, costs 90 cents in decreased benefits it is accurate to say that you only realize $0.10 in net income.
If you were a free person rather than a slave to your own negative emotions your thinking would improve and you might be able to learn new things.
AndrewD seems to think you can. I think you cannot.
You know, its interesting. AndrewD likes "being right", more than most people, while I am often pleased by being found wrong. So you could make three people happier; but you won't.
Why am I not surprised that the same guy who thinks letting people keep more of the money they earned is a "give away" would also think that reducing government assistance can "honestly" be described as a "tax increase"...
As I noted the author has touched on real a problem; (and one worthy of discussion; personally I don't favor dollar for dollar reductions in assistance as a person's income rises, because of the disincentive that creates) but he's framed it in a very dishonest way...To interpret the reduction of government assistance as a "tax" is ridiculous, because there's no "tax" involved. This is just a deliberate misuse of terminology for the purpose of trying to misleadingly portray lower income people as being heavily "taxed"....
The fact that rube views the author's transparent dishonesty as honesty won't rank as the most surprising thing I learn today...
Rube has demonstrated repeatedly that he's a big fan of transparent dishonesty, so long as it leads to conclusions he approves of.
Last edited by Lord Jim on Mon Dec 09, 2013 7:00 am, edited 2 times in total.
rubato wrote:
The "marginal tax rate" in this case accurately describes the economic effect on those individuals. If each dollar more you earn, costs 90 cents in decreased benefits it is accurate to say that you only realize $0.10 in net income.
Yes it is. But it is not correct to say it is the "marginal tax rate".
When people say things like that it is obvious that they are not impartial. If someone needs to make a point, using simple facts instead of one's own twisted way of seeing things makes it believable. When something like # 11 on the list is present, it makes all the other points on the list questionable.
People who blindly accept that list as factual are people who only believe what they want to believe...
If someone needs to make a point, using simple facts instead of one's own twisted way of seeing things makes it believable
That's exactly right...
Using the kind of tactic the author of this article uses, (and most of rube's sources use) does nothing but detract from any legitimate point that could be made.
rubato wrote:
The "marginal tax rate" in this case accurately describes the economic effect on those individuals. If each dollar more you earn, costs 90 cents in decreased benefits it is accurate to say that you only realize $0.10 in net income.
Yes it is. But it is not correct to say it is the "marginal tax rate".
When people say things like that it is obvious that they are not impartial. If someone needs to make a point, using simple facts instead of one's own twisted way of seeing things makes it believable. When something like # 11 on the list is present, it makes all the other points on the list questionable.
People who blindly accept that list as factual are people who only believe what they want to believe...
I encouraged you to click through and read the text. Too much for you?
rubato wrote:
I encouraged you to click through and read the text. Too much for you?
From "the text":
.....Low-income families benefit from an array of tax credits and transfer programs, such as the Earned Income Tax Credit (EITC) and Medicaid. The phase-out of these programs at near-poverty levels of income leads to high marginal tax rates on low- to moderate-income families,......
And this supports your twisted conclusion that there is a "marginal tax rate as high as 95%" on a low income single parent and the "highest tax marginal tax rates" on "the struggling lower-middle class" how....?
