Thursday, July 20, 2017

Why do poor people have so many children?

Why do poor people have children they can't afford? It's a reasonable question. One has to ask the question: which came first, the poverty or the children?

According to BLS data from 2011, families receiving some form of federal assistance have an average size of 3.7 people (including the parents). The nationwide average family size is 3.14 people (including parents). The same data shows that nearly half of families receiving assistance are single-parent households. Let that sink in. The number of families receiving assistance, according to the data, is 6.6 million. Of those, 3.2 million are single-parent households, and 3.4 million are two-parent households.

The average size of two-parent families receiving assistance is 4.4 people. That means, they have 2.4 children, on average. The average size of single-parent families receiving assistance is 3.7 people. That means single-parents on assistance have, on average, 2.7 children.

Let's take that and run the numbers based on the number of assistance-receiving households.
  • Single-Parent households receiving assistance is 3.2 million
  • Average number of children per single-parent household is 2.7
  • Two-Parent households receiving assistance is 3.4 million
  • Average number of children per two-parent household is 2.4
The number of children in 2011 who's parent(s) received assistance is:
Single-Parent Families: 3,200,000 x 2.7 = 8,640,000
Two-Parent Families: 3,400,000 x 2.4 = 8,160,000
Total: 16,800,000 children

To put that in context, the average family-size is 3.14 people. Let's take the numbers above, and lower the number of children in each household to bring it in line with the average family.
Single-Parent Families: 3,200,000 x 2.14 = 6,848,000
Two-Parent Families: 3,400,000 x 1.14 = 3,876,000
Total: 10,724,000 children

As you can see, the difference is 6,076,000. That's the number of "extra" children in households that receive assistance. That's a lot of mouths to feed.

Now let's talk about the political problem. One party talks about "abstinence only", rails against birth control and abortion, and generally couldn't care less about the kids once they are born. The other party supports contraception and abortion rights, and cares about the kids to the point of encouraging more of them to be born on the public dole.

I'm not sure what is the right solution. I really don't want to interfere with the reproduction choices of other people. On the other hand, I really don't like to encourage the production of more children who will have a hard time escaping the poverty trap they were born into.

Since our broken political system can't seem to come up with useful solutions, perhaps the non-profit sector should fill in the gaps.

References:
Spending patterns of families receiving means-tested government assistance
The Majority of Children Live With Two Parents, Census Bureau Reports

Do liberals really want to go back to the tax rates of 1950

Do Liberals Really Want to Go Back to the Tax Rates of 1950?

I'm sure you've heard liberals trot out this meme in the past:











To a "tax the rich" liberal, this sounds like music to the ear. There's just one problem: the poor also had higher taxes.

1950:
The lowest rate in 1950 was 17.4%, covering income from zero to $4000.00. The average income was $3210.00, meaning their tax bill was about $558.54.
The top rate was 84.357% on income above $400,000.00. There were no refundable tax credits, so no one had a negative tax rate via EITC or CTC.

1950 conversion to 2017 dollars:
The average income of $3210.00 converts to $32,569.38 in 2017 dollars. The tax bill of $558.54 converts to $5,667.07 in 2017 dollars.

1950 dollars on the 2017 tax brackets:
If we put $32,569.38 on the 2017 tax brackets, the total tax bill comes to $4,419.16. That's a savings of $1247.91 in taxes using the 2017 tax brackets. That means, by reducing taxes on the average person, they get over $100.00 more per month NOT seized by the government.

Now, let's look at the top tiers in 1950. In order to get the top tier tax bill, you had to make over $400,000.00 per year in 1950. Putting that into 2017 dollars, that's $4,058,489.63.

Our current top tax tier is 39.6%. Using the 1950 tax tiers, one could make up to $28,000.00 to get up to 39%. That's $284,094.27 in 2017 dollars to get to a 39% tax rate.

We don't have an average 2017 income yet. The most recent I could find was 2015, which was $48,098.63. Despite the liberal hand-waving over "falling income", the average income has actually grown since 1950 when adjusted for inflation. The 1950 average, adjusted to 2015 dollars is $31,569.48.

Even if we look at the median income, wages have gone up even more! In 1950, the median household income was $3319.00, which is $32,641.47 in 2015 dollars. The 2015 median household income was $55,775.00, an increase of $23,134.00.

Conclusion:
As we did in 1950, we currently have a mountain of public debt. The debt owed in 1950 was left over from World War II. The debt we owe now is because each political party keeps putting their interests ahead of what's best for the country. Democrats fund negative tax rates for the poor and massive / wasteful social programs, while Republicans cut taxes and insist on massive military expenditures.

This looks suspiciously like the institutional rot that brought down the Roman Empire. If we're going to have a future, independent of foreign domination, we need to get our financial house in order. We absolutely MUST raise taxes on EVERYONE, balance the budget, and pay down the debt.

If you want my taxes to go up, you'd damn well be prepared for your taxes to go up too. If my taxes go up to 40% or 50%, everyone had better pay at least 25%.