An American “work ethic” principle, embraced by people on both sides of the ideological spectrum, is this: “If you work hard, you can provide for your family, and ensure that your children are better off than yourself.”
Most of the people I know who are conservative are either willingly choosing not to see the reality of life in America, or they are trusting the wrong sources of information. The WWII generation especially lived under vastly different circumstances than people do now. In an effort to put real numbers on the differences, let’s start with the true costs of living in today’s dollars compared with costs of living in 1960s dollars. There is a “yuge” disconnect, a lack of communication and understanding, between my parents’ generation and my kids’ generation. When I sit down and talk with my parents, they honestly have not had to deal with a country where work was not rewarded enough. Ever. They are just not aware of the reality faced by 1/3 of American families. That’s right. 1/3 of American families are what we call the “working poor”. It’s not because of drugs. It’s not because of broken families. It’s not because of crime. In fact, those 3 things: drugs, broken homes, crime, are all symptoms, not causes. Let’s start with a college student trying to work his or her way through college. Can it be done if your family is unwilling or unable to assist you?
|What It Cost in 1965||What It Costs Now||How Much Is That in 1965 dollars?|
|Avg monthly rent in NYC||$200||$3800||$1900|
|Avg 2 BR rent in PA||$60||$1,100||$550|
|Annual tuition at Penn State U (for PA residents)||$500||$17,514||$8757|
|Hours worked to pay 1 year tuition||500||2416||2416|
|What is that in weeks?||12.5 (3 months)||60.5 (14.5 months working full time)||60.5|
|Hourly cost of rent in PA (2 BR)||$0.008 (not quite a penny)||$1.70||$0.85|
|Cost per person hourly (2 wage earners)||$0.004||$0.85||$0.425|
|Hours worked to pay for housing for 1 month||30 (3/4 of a week labor paid a month rent)||76 (2 weeks labor pays the rent for a month)||76|
|Hours worked to pay for 12 months housing||360 (9 weeks or 2 months)||912 (22.8 weeks or 5.5 months)||912|
|Working Full Time, Months to Pay Tuition + Housing for 1 year at min wage||5 months||20 months||20 months|
Wake up people! If a college age person has a family who cannot assist them, or no family at all, they have to work HALF THE YEAR just to pay the rent. Now, how the heck to we expect them to be able to save enough money for 4 years of housing, even if they are eligible for 100% financial aid to get through college? I am tired of hearing people complain about “entitlement” mentality. Do not use this word unless you really understand who you are calling “entitled”.
I’ve seen the actual numbers. This is not made up. 1/3 of American families are earning below 200% of the poverty level. That means an annual household income less than $48,500 per year at today’s costs of living. That’s $12.75/hour with two people working full time or $25.26/hour with one person working full time. And 1/3 of Americans LESS than this, many significantly LESS. One Third. When we break this down by ethnic groups, minorities are even in worse shape.
The business community knows what the situation is. Congress knows what the situation is. Corporate executives know the situation and don’t care about “the little people”. They live in luxury and comfort and care little for those who are condemned to a life of urban or rural filth. Most of middle class America lives comfortably in suburban neighborhoods, trying to keep up with all the activities and hustle bustle of life, paying for things they can’t afford, paying high interest loans and credit card debt, or trying to save something for their kids to go to college or for retirement. I’m certain there are many of my parents’ generation who can not acknowledge or see that they are among the “haves” of society. They were able to work hard and save, and they will have their needs met throughout their remaining years. Theirs was an economy in which it was possible to work one’s way through college, and then count on a career that paid an adequate salary. Theirs was a time when one could work at the same job for 40 years and rely on a pension when reaching retirement age.
The problem is one of trust. It would be unheard of in my parents’ time NOT to be able to trust one’s elected officials to the highest offices. They are SUPPOSED to put the country ahead of self-interest. Corporate executives are SUPPOSED to be able to run companies in an ethical, responsible way. There are SUPPOSED to be checks and balances built in to all management and government structures to stop corruption and blatant, rampant mistreatment and abuse of workers. Exploitation – we have laws against such things, therefore no one does it, right? We have the media (which is to a large degree bought and paid for BY the very ones doing the exploiting) – the media has middle America convinced that crime, drugs, violence and “bad people” are the ones who want free handouts and there really isn’t an economic policy problem. Nah, you can just go back to your church Bible studies. Nothing to see here….
The selfishness and greed in corporate America has resulted in many politicians afraid to even hint at raising tax revenue in order to provide some relief to the growing population of poor. The tax rates don’t need to increase, in fact that tax rates can go down if Congress is willing to pass a flat tax rate and eliminate ALL itemized deductions. Give every household a standard deduction at the “federal poverty level” for that household size; households with two wage-earners get to double that amount so there is no marriage penalty, and then pay a flat tax rate on the rest. Boom. No deductions beyond that point. Tax it all.
In a typical household of 4 – 2 adults and 2 children – the first $48,500 would not be taxed. They pay nothing. They get rewarded for working by paying no tax. People would find it extremely simple to file their income tax forms, and it would be much easier for the government to determine what revenue it can expect.
But what about the charitable giving tax deduction or the mortgage deduction, or the medical expense and college expense deduction? As stated in the paragraph above, the “flat tax” rate would result in couples who have 2 children who earn between $0 and $48K paying essentially no tax at all. The first $32K is not taxed for childless couples. Beyond that amount, the flat tax rate could be as low as 10-12%. This would include corporations and individuals. ALL earnings beyond a fixed amount get taxed.
Folks who are used to making deductions for things like mortgage interest, medical and office expenses (and whose gross earnings are less than $200K) will find that they end up paying less in taxes under this simplified system. Imagine a country without the IRS. A subject for another blog post is the fleecing of lower- and middle- income Americans with high cost of prescription drugs and medical deductibles. Health care though will have to be the topic of another article.
And we wonder why politics is nasty? We wonder why the electorate has lost faith in BOTH political parties, and why candidates who are perceived as “revolutionary” and even “crass and vulgar” are doing so well? Really?