Tag Archives: Income

Commentary

Obama’s reversal of the Bush tax cuts would cut your take-home pay

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Investors Business Daily explains what would happen if Obama allows the Bush tax cuts to expire. (H/T Ponder With Us)

Excerpt:

Professor Michael Graetz of Columbia University recently estimated in the Wall Street Journal that letting the tax cuts expire will cost the U.S. economy $10 billion a month in added withholding from paychecks.

Goldman Sachs economist Alec Phillips estimates letting the Bush cuts expire could slash “nearly 10 percentage points” from disposable income growth in the first quarter of next year, and nearly two percentage points from GDP in the first half.

With GDP now at a tad above $14 trillion, the impact could be $280 billion or more in the first six months alone.

In short, the higher taxes could very well push us back into recession — at a time when the economy is struggling under 9.6% unemployment with little if any private-sector job growth.

What’s most worrisome is what it will do to the working taxpayer. His or her take-home pay is about to fall, leaving noticeably less to spend and save.

A married couple without children and an annual income of $80,000 would have an added $221 taken from their paycheck every two weeks, the Bloomberg report says, quoting the H&R Block Tax Institute. That jumps to $558 for couples bringing in $240,000.

Data from the Tax Policy Center show even those with modest family incomes would take a hit. For example, a couple with income of $60,000 and four children can expect to pay $130 more every two weeks to Uncle Sam. It doesn’t get much better for those who make just $40,000. They’ll find about $108 more withheld every other week.

Obama likes to spread the wealth around. You don’t mind, do you? He knows so much better than you do how to spread your money around.

Commentary

What is the “root cause” of poverty and inequalities of wealth?

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The Heritage Foundation explains – it’s not what you think.

Excerpt:

New data released today by the U.S. Census Bureau show the largest increase in poverty in U.S. recorded history. Under President Obama’s watch, an additional 3.7 million Americans fell into poverty in 2009.

Buried in the Census report are startling figures revealing the principal cause of child poverty: the collapse of marriage. Single mother families are almost five times more likely to be poor than are married couples with children; overall, nearly 70 percent of poor families with children are headed by single parents.

The big secret in the Census report is that marriage is America’s number-one weapon against child poverty. But marriage has been rapidly declining in our society as the number of women who have children without being married has skyrocketed.

Historically, unwed childbearing was rare. In 1964, when the federal government launched its War on Poverty, 6.8 percent of births were to single mothers. Today, the unwed birth rate has soared to 40 percent: four of every 10 births are to a single mother. For Hispanics and African Americans, it’s significantly higher.

This trend is extremely detrimental for society. When compared to children raised by married parents, children raised by single parents are more likely to have emotional and behavioral problems; be physically abused; smoke, drink, and use drugs; be aggressive; engage in violent delinquent and criminal behavior; have poor school performance; and drop out of school.

Contrary to conventional wisdom, nearly all unwed fathers are employed, and most earn enough to lift mother and child from poverty. Tragically, however, few unwed parents marry.

Many commentators will say teen pregnancy accounts for most single motherhood, but this is false. Less than 8 percent of new single moms are under 18. In fact, most unwed births are to young adult women in their 20s. The majority of unwed moms don’t have much education; most end up on welfare.

If Americans are serious about reducing poverty and getting control of federal welfare spending, we must strengthen marriage. We can do this in several ways, beginning with reducing anti-marriage penalties currently in welfare programs and providing factual information to low-income communities about the benefits of marriage.

Do you know who is pretty good on this issue? Maggie Gallagher, that’s who. She knows everything about why people should get married.

Excerpt:

5. YOU WILL EARN MORE MONEY. Men today tend to think of marriage as a consumption item—a financial burden. But a broad and deep body of scientific literature suggests that for men especially, marriage is a productive institution—as important as education in boosting a man’s earnings. In fact, getting a wife may increase an American male’s salary by about as much as a college education. Married men make, by some estimates, as much as 40 percent more money than comparable single guys, even after controlling for education and job history. The longer a man stays married, the higher the marriage premium he receives. Wives’ earnings also benefit from marriage, but they decline when motherhood enters the picture. Childless white wives get a marriage wage premium of 4 percent, and black wives earn 10 percent more than comparable single women.

6. DID I MENTION YOU’LL GET MUCH RICHER? Married people not only make more money, they manage money better and build more wealth together than either would alone. At identical income levels, for example, married people are less likely to report “economic hardship” or trouble paying basic bills. The longer you stay married, the more assets you build; by contrast, length of cohabitation has no relationship to wealth accumulation. On the verge of retirement, the average married couple has accumulated assets worth about $410,000, compared with $167,000 for the never-married and $154,000 for the divorced. Couples who stayed married in one study saw their assets increase twice as fast as those who had remained divorced over a five-year period.

Yet another reason for fiscal conservatives to take social conservatives seriously. Marriage makes people more independent, and that means smaller government, lower taxes, and more liberty. What we need to do is block feminists from undermining marriage to serve their gender-neutral ideology, and stop socialists from undermining marriage with the welfare programs which incentivize single motherhood.

News

Obamacare’s impact on ER wait times and low-wage workers

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First, ER wait times. (H/T ECM)

Excerpt:

As the number of insured people goes up while health care reform takes place, the long waits and crowded lobbies at emergency rooms are anticipated to increase as well.

“We’re starting out with crowded conditions and anticipating things will only get worse,” American College of Emergency Physicians president Dr. Angela Gardner told the Associated Press.

Nearly 32 million more people will have health insurance as a result of changing health-care laws, and about 16 million are to be added to the Medicaid system, but that apparently won’t keep them out of the ER, the AP reported.

“Just because we’ve insured people [that] doesn’t mean they now have access,” Dr. Elijah Berg from Boston told the AP. “They’re coming to the emergency department because they don’t have access to alternatives.”

[…]Since 2006, when it began offering government-run health care to its residents, Massachusetts has been considered the test model for the federal health changes, requiring health coverage for everyone, but data has shown visits to the ER have continued to rise since the Massachusetts law took place.

ERs are already overly crowded, with the biggest users being those under the federal Medicaid plan. Many doctors limit the number of Medicaid patients that they see because of the low rate of reimbursement from the government.

Here’s what should have happened. Voters should have looked at Massachusetts and Tennessee and seen what government control of health care does to health care. Universal coverage increases demand, but supply stays the same because of onerous certifications, taxes and regulations that block new entrants. Somewhere along the line there will be a shortage. And that means waiting lists, abortion, denial of care, and eventually euthanasia in order to keep costs down.

But there’s more – from the Heartland Institute.

What about Obamacare’s impact on low-wage workers? (H/T Rob)

Excerpt:

The requirements of President Obama’s new health care regime could penalize low-wage workers and cause a further slowdown of hiring for positions at chain restaurants and other small businesses.

White Castle, a national fast food chain, recently announced it would slow planned expansion in the United States and curtail hiring at its numerous restaurant outlets thanks to Obama’s law, which the chain says will cut its earnings in half.

According to a White Castle representative, the requirement that employers pay a $3,000 fine to the federal government for every employee whose out-of-pocket cost of health insurance exceeds 9.5 percent of their income will destroy their business model.

[…]Diana Furchtgott-Roth, a health care analyst at the Hudson Institute in Washington, DC, says much of this process is out of the employer’s control.

[…]Furchtgott-Roth says this aspect of Obamacare is part of a larger trend toward government pricing low-skilled workers out of the U.S. economy.

“The burden of all these Obamacare provisions is going to fall more on America’s low-skilled workers—the workers at White Castle, Burger King, and so on. Because their labor will become more expensive for companies to use, we’re going to see more mechanized solutions, a trend that is already happening in Europe,” Furchtgott-Roth said.

Well, some of these people who don’t pay income taxes are certainly going to be getting a wake-up call. Larger companies like John Deere, Verizon, Valero, Caterpillar, etc. already announced that they were going to be taking huge hits to their bottom line as a result of Obamacare. All these good intentions and high-minded blabberings don’t amount to any benefits for American working families. Happy-talk wins elections, but it doesn’t pay the bills or feed the children.

Next time, we need to be more diligent at looking at what actually happens in other countries and even in our own states when people try to nationalize health care in order to provide universal coverage. We can have universal coverage – we just need to let people choose what level of coverage they want and we need to make market reforms to the health care industry. Choice and competition works better for consumers. That’s real health care reform.