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$40, the Payroll Tax Cut, that wicked cough, and you
By | December 21, 2011
You might recall I wrote earlier about “The 99%.” “The 99%” are not actually the working class and unemployed folks standing in the park holding cardboard signs, if you ask me. “The 99%” includes CEOs, professional athletes, Senators, neurosurgeons, etc., who have little in common with the cardboard-sign-holders, in terms of lifestyle, life chances, or vested interests.
So now the White House (my Facebook friend), is soliciting comments about “what $40 means to you.” Because, they explain, if the Payroll Tax Cut is not extended – and the Republican majority has zero interest in extending it – that’s the amount by which a ‘typical’ paycheck would be short.
Typical?
Forty bucks is the amount that someone would lose on a biweekly (twice a month) paycheck if they earned $50,000 per year.
People who earn $50K per year are part of “the 75%,” but most of the cardboard-sign-holders are not $50K/year folks.
Even if they did get lucky and find a full-time job, it would have to be as an accountant, or a psychologist, or a biologist, for a few examples – to be part of “The 75%.” And the folks who are commenting on the Facebook page – and most of the comments are simply hateful – but the few folks who do answer the question, they’re almost never $50K/yr people. Just like the cardboard-sign holders.
“$40 would mean I wouldn’t have enough for groceries for the next two weeks or transportation to work & school.”
“I could give up my internet access or having a phone.”
“Losing $40.00 would mean not being able to buy school lunch for my child, for three weeks.”
“$40 is my whole food budget for a week. Or fuel for my car to get to work for 2 weeks.”
“Medical bills… I have made a contract with these clinics for $50.00 a month.”
“$40 = week of gas.”
The White House has a little calculator that can tell you what you’d stand to lose, or what you’d stand to gain, if the Payroll Tax Cut were rescinded, versus if it were expanded by another 1.1% as it says in the proposed American Jobs Act – whether you are a single-income or a multiple-income family.
Let’s compare these numbers to the population figures we looked at before.
“The 75%” = People in the US who make $50K or less per year.
If you make $50,000/year before taxes, you lose $1000/year when the Payroll Tax Cut ends.
If the Jobs Act were passed, you’d keep your $1000 and raise it by $550, for an “extra” $129 per month ($1550/yr).
“The 66%” = $40K or less per year.
If you make $40,000/year before taxes, you lose $800/year.
(Examples: plumber; math teacher; or drug rep married to a part-time preschool teacher; or truck driver married to a floral designer, etc.).
Pass the law, keep your $800 and raise it by $440, for an “extra” $103 per month ($1240/yr).
“Since I already don’t have health insurance this means an increasingly unhealthy diet as well.”
“40 bucks would be 20 for gas and 20 for a past due bill.”
“$40 = month of communication for cellphone.”"
$40 is a healthy, home-cooked Monday-Friday dinner for my family.”
“You know, $40 a paycheck isn’t going to hurt my bottom line so much. It’s a dinner out for my family, a months worth of school lunches for my kids. We could stretch it out and cover those expenses. But that’s just us, we are blessed.”
“The 55%” = $25K or less per year.
(Example: military rank E4 (Corporal, Specialist, Petty Officer 3rd Class, Senior Airman).
If you make $25,000/year before taxes, you lose $500/year.
Pass the law, keep your $500 and raise it by $275, for an “extra” $65/month ($775/yr).
“The 33.5%” = $15K or less per year.
If you make $15,000/year before taxes, you lose $300/year (Example: full-time cleaning lady, bouncer, part-time dental hygienist).
Pass the law, keep your $300 and raise it by $165, for an “extra” $39/month ($465/yr).
“The 25.4%” = $10K or less per year.
If you make $10,000/year before taxes, you lose $200/year.
(Examples: full-time minimum wage worker in Wyoming or Georgia, $5.15/hr; or part-time $10/hr worker, working 50 weeks per year).
Pass the law, keep your $200 and raise it by $110, for an “extra” $26/month ($310/yr).
“Dinner and a movie with friends. Or I could cut down on my 401k contribution.”
“1/2 a textbook for next semester!”
“$40 is the cost of school lunches for 2 weeks for 2 kids.”
“1 case of diapers or a case of formula for my newborn twins.”
“Gas for my car for the month.”
“Don’t have a paycheck to take $40 from. Hanging on by a frayed thread.”
People in “the 66%” pay the same prices for groceries & heat & blood pressure pills & cell phones & diapers as people in “the 33.5%.” But some will get an extra $100, and others only $40, per month, and that only if we, the people, pass the Jobs Act.
Lose the Payroll Tax Cut instead, and now the math teacher will lose $67/month, while the lady who cleans his house will lose $25/month. (They still both pay $40/month for gas or cellphone or school lunches or 1/2 a textbook.)
If you’re a libertarian, that probably sounds fair… until you consider that it means the math teacher has $3266/month left over, while the cleaning lady has $1225/month left over. Which one has a better shot at buying the gasoline, diapers, school lunches, and blood pressure medicine they need every month?
It’s your basic flat-tax problem. Imagine if each were taxed, for example, a “fair and equal” 50%. The math teacher would still have $20K to live on for a year; the cleaning lady would only have $7,500 left to live on for a year. The difference in their “fair and equal” life chances is immediately evident. This is why we tax higher incomes at higher rates – it’s not as big an ultimate bite for those who are wealthier.
(Before you ask, my libertarian friend, no, the cleaning lady making $15,000/year is not eligible for “welfare” or Medicaid. She could, of course, get $16 a month – yes, that’s sixteen dollars – in Food Stamps [based on $400/month rent]. The math teacher would basically not qualify for anything, not even for $16, unless s/he were supporting five dependents.)
Why on earth is this discussion appearing in a doctor blog?
… Because I can prescribe an albuterol inhaler to treat your asthma, but I can’t buy it for you. It costs about $45/month. What if you decide your kid needs it more than you do? You’re not filling that prescription.
… Because I can prescribe birth control pills, but I can’t buy them for you. They cost about $30/month, unless you get fancy (then maybe $250/month). If you can’t afford them, then Plan B may be $50 – if you happen to have $50, right when you need it.
… Because a good antibiotic might be $30, so you might decide it’s better to wait and see if the cough and fever go away by themselves. (You didn’t have $100 for a chest x-ray, so we’re kind of guessing, anyway.)
… Because I’d like you to get a blood count and a metabolic panel (about $25 out of pocket), and also to take three basic supplements (multivitamin with minerals; vitamin D; fish oil – about $20 at the discount store), for your disabling fatigue and body aches. (Most doctors would shudder at what bare-bones medical care that is; some might consider it approaching malpractice, for failing to do a complete workup.) However, a one-month bus pass to get to work costs $50. You can’t buy both, so I just never hear back from you.
… Also, of course, because you can’t pay your doctor bill – either your $30 co-pay, or else your $50 out-of-pocket office visit. Maybe this means you don’t come in until you’re so sick you have no choice, but you still can’t pay me. This means I’m looking for a third moonlighting job. Without one, I won’t be able to afford to see you, either.
It’s not only about what $40 per paycheck means to me and my Facebook friends. It’s that an economic collapse is also a health problem – seriously, a BIG one – and I don’t have the tools I need to help you.
You know those cardboard-sign holders in the park? The ones the City Council just decided to disperse, by fair means or foul? We’d better get down there and join them.
Resources:
American Jobs Act/Payroll Tax Cut calculator:
http://www.whitehouse.gov/economy/jobs/we-cant-wait
Food Stamp benefit calculator for Oregon:
https://apps.state.or.us/fsestimate/
Nationwide Food Stamps income limits, based on household size:
http://www.fns.usda.gov/snap/applicant_recipients/eligibility.htm#income
To find your own “percentile”:
http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2010
For your state’s minimum wage laws:
http://www.dol.gov/whd/minwage/america.htm#content
To see military pay scales:
http://www.navycs.com/2011-military-pay-chart.html
Estimated salaries:
http://www.simplyhired.com/a/salary/home
Income by race:
http://www.census.gov/compendia/statab/2012/tables/12s0701.pdf
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