It does sound absurd, but a single parent making $30K is net negative vs a single parent working part time and making $15K.
Every single parent I have known would disagree with that assertion. I assume you are factoring in the cost of child care. Most low income single parents utilize lower cost forms of child care from churches, family and/or groups of parents that bind together to make sure all the kids are supervised when parents are working.
There is a difference between greed (good) and envy (bad). A lot of rich people are greedy whereas a lot of poor people are envious. It amazes me how people (coworkers and friends) complain about not having more money yet have no ambition to take on the necessary responsibilities to ensure they receive a greater reward for the greater amount of work they produce. In all, I have to say it boils down to motivation, dedication, and ambition. If you are committed to working a minimum wage job and spending all your free time jerking-off and smoking weed, how could you possibly ever expect to make more money, have a better job, career and life?
If you think that, in most cases, health benefits, etc are going to eat up more than half of a 30k salary, you must have eaten a lot of paint chips when you were a child.
Since I come from a natural sciences background, I had that discussion with an economics prof at A&M in the 80's. He could not see the parallels that any unlimited growth system would inevitably overtake the the carrying capacity of it's environment (that every great boom would inevitably bust) and that a system in stasis would be the more sustainable economic model, stable population, stable production, stable consumption and would still allow for incremental improvements in the quality of life through innovation. The stockmarket is purely a psychological game of the perception of value. (But of course, so is fiat money.)
Medical assistance, Housing, Food, Income tax credit. A single mom of 2 will net less on $30K vs $15K. If you are talking about $29K vs $15K, then the $29K will net more.
You're completely wrong, but the sad part is that you will refuse to accept the facts in favor of your inaccurate, ideologically driven beliefs.
I think the truth is somewhere between what you and Refman are saying. Marginal tax rates faced by the poor (but not the extremely poor) are indeed very high. Here's a fascinating paper that gives figures by income level and state. So you can see that under certain conditions, marginal tax rates can exceed 100%, meaning that a person actually loses more money through benefit cuts and taxes than they get in increased income. I'm skeptical that it's often the case for so large a change as going from $15k to $30k, but that's actually not so outlandish, depending on which state you're in. In the table on page 14 of the paper I linked to, you can see that a single parent of two in Alaska who starts at the poverty line and doubles her income (going from $19,530 to $39,060) will face an effective marginal tax rate of around 106%, and so will actually have less money in her pocket than before.
I might agree, if only long-run economic growth weren't driven primarily by improvements in technology. What's the environmental carrying capacity for iPhone apps? For efficiency gains in industrial machines? For improved understanding of logistics in retail stores? Those are the kinds of things that drive long-run growth in developed economies.
Doesn't the states manage how welfare benefits are distributed now? So this might be true in one state but not the other 49. Also, welfare is now a temporary assistance program meaning you have to try to start working if you aren't already. I am not sure about your numbers. I do think that whatever system we have should be set-up so that the benefit declines by a small percentage for every dollar you make extra in a way that incentives people to work. Food stamps works that way and one reason why it is the most successful gov't entitlement program there is.
You are correct, but the numbers are higher. A family is better off making 30k than 69k because of all the benefits that expire as they move between those incomes. Known as the "welfare cliff."
^Well, color me surprised. That's crazy. Thanks for sharing that. It's probably not controversial to say that marginal rates shouldn't exceed 100%, but an interesting question is whether it might be worth having high marginal rates for single parents if it helps make it more feasible for them to spend more time at home with the kids. My takeaway is that I should have a kid, not get married, find a part-time job that pays very well, and work just enough to get to $29k.
Yeah, I think that is definitely the choice people end up making. And as a result, their income stagnates while the better off continue to work, get raises, and accumulate wealth. Inequality increases. Here's another chart.
The issue is that a lot of these entitlements have cut-offs. So you make one additional dollar, and you lose a benefit that's worth thousands of dollars. Seems that this needs to be fixed so that people have incentive to work and shed the benefit. Not by cutting benefits but by making a sliding scale instead of an all-or nothing proposition.
Yes, and that will either require expanding the program or cutting it back so that it becomes a sliding scale.
not necessarily. you can use the same amount of money. you are extending it for some and cutting it back for others, but only around the "cliff" points to smooth them out and take out the dis-incentives. Besides, if the argument holds true, once you remove the cliffs, even if you initially have to put more money in, then you should start moving people further off of welfare and that should reduce the program money needed as well.
Yeah you're right. Although you'd essentially be taking money from poorer people and giving it to people slightly better off, no?
