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When Work Doesn't Pay For The Middle Class

Discussion in 'Political Discussion' started by Real World, Oct 13, 2009.

  1. Real World

    Real World Moderator Staff Member

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    Do we punish hard work, or success? If not, then do we kind of discourage them? I think it's a fair question for discussion.

    On The Cover/Top Stories

    When Work Doesn't Pay For The Middle Class

    Janet Novack and Stephane Fitch, 09.17.09, 08:40 PM EDT
    Forbes Magazine dated October 05, 2009

    Middle-class folks are finding that a raise or second paycheck doesn't always mean living better. Time to work less?

    [​IMG]
    Judith Lederman would like to find another $120,000-a-year job. But Casey, her high school senior daughter, will qualify for $19,000 a year more in college financial aid if mom has to settle for half that salary.

    Eighteen months after being laid off, Judith Lederman, a 50-year-old divorcee who lives in Scarsdale, N.Y., is ready to consider jobs paying half the $120,000 she earned as a publicity manager at Lord & Taylor. That's mostly because she's desperate, but it also makes sense when you consider how this country punishes work effort. While the first $60,000 of her income would be lightly taxed, the next $60,000 would be hit with what is in effect a 79% tax rate. Given a choice between a part-time or easy job paying $60,000 and a demanding, stress-ridden job paying $120,000, Lederman would be wise to take the former. In the tougher job she would be contributing twice as much to the economy. But she wouldn't be doing herself much good. It would make more sense to take it easy and spend more time with her high school senior daughter, Casey.

    How did a middle-class single mom wind up with a 79% marginal tax rate? At $120,000 she would pay $16,500 a year more in federal and state taxes, wouldn't qualify for the five-year $12,000-a-year cut in her mortgage payments she's applying for and would be eligible for $19,000 a year less in need-based college financial aid.


    When Work Doesn't Pay For The Middle Class - Forbes.com

    I know people who refuse to fall behind on purpose, but as a result, don't qualify for modification.
     
  2. Real World

    Real World Moderator Staff Member

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    Why would anyone want to earn a few grand more? Why strive to do better, when you are financially punished for it?

     
  3. Mrs.PatsFanInVa

    Mrs.PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    #24 Jersey

    It's not just the federal government which does so......Many years ago when I was a single mother of 3 I took a second job for (what I thought would be) a few months in order to give my kids a little more than the bare necessities of life. My ex-husband found out about it, contacted his lawyer and immediately had his child support payments cut by the same amount I was earning on the second job. Apparently there's some child support rule which adjusts contributions based upon the other spouse's income.

    That second job I took for a "few months" ended up lasting over 10 years in order to make up for the cut he got in order for me to pay for the bare necessities on my own. In other words, instead of being "extra" cash it became "the" cash.

    He's retired now, at a very early age, on his savings. I'll be working forever to make up for lost time.

    But, on the plus side, I've got three grown children who still talk to me.

    :)
     
  4. maverick4

    maverick4 Banned

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    Real World would probably twist this to say that your story de-incentivizes women to work.
     
  5. PatsFanInEaglesLand

    PatsFanInEaglesLand In the Starting Line-Up

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    #37 Jersey

    Pure unadulterated class warfare-fueled jealousy.

    What else but jealousy or pandering to those jealous people is the explanation for someone supporting a progressive tax scale?
     
  6. Mrs.PatsFanInVa

    Mrs.PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    #24 Jersey

    Self esteem? Self-satisfaction? The feeling you get from a job well done?
    The desire to improve yourself and not just your lot in life? The chance to build not only your own character but to show your children how best to build their's?
     
  7. Real World

    Real World Moderator Staff Member

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    Child support isn't something I can say I specifically understand. Case by case I can offer an opinion, but I don't know the particulars of how figures are calculated in general. In your case, something that comes to mind is how his income would be treated, had he taken up a part time job for some added income. Would you, or would the system even, require him to pay a portion of that income toward an increase in support payments? I'd guess that he would. Again, I don't know how they calculate this stuff, or how the criteria works. Is it a sitution where it's combined income is used, with an adjustment made to compensate the parent for the added costs of custody? Or is it soley based on the one parents income, and not on the other. I don't know. I'll continue this below...

    Twist what MMav? So a divourced mom gets $400 a week in child support from the dad, to raise 3 kids. She goes out and gets that earns her $200 a week part time, and the judge comes in and subsequently reduces the original $400, to $250, or maybe $300. (I'm throwing figures out there for the sake of discussion) Well, doesn't the mom have to now decide if it's worth it to commit an additional 15-20 hours a week of work, time she can't spend with her children, or enjoy some personal life, that she used to have before, for the extra $50-100 it nets her? What if there are additional costs like a baby sitter, or maybe travel to the PT job, that need to be considered as well? I'd say that there is certainly a logical case that could be made for de-incentivization. Again, I don't know the particulars, nor the specifics, as I'm totally hypothesizing here.
     

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