View Full Version : Less Income = More Disposable Cash
I participate in quite a few forums. The increase to taxes has been a hot topic on just about every forum I participate in. While taxes on everyone have gone up for most of us and we are now expected to make due with less nothing has happened to entitlement spending. While entitlements may not seem like a big deal to many people, if you’re a tax payer they probably should. I decided to crunch a few numbers and show a comparison that demonstrates just how entitlements work.
Example 1: Single mother with 3 children who earns $25,000 per year and receives $500.00 per month in child support. Because of her low income she receives subsidized housing that also includes utilities. She receives EBT of $300.00 per month(Food stamps), government funded healthcare and government subsidized childcare. (example 1 is a real person and these are actual figures)
Figures below are monthly
Gross Income $ 2,083.33
Child Support $ 500.00
SS and MC $ (159.37)
State Tax $
Fed Tax $
Insurance $
__________________________
Total Net Income $ 2,423.96
Housing $ (325.00)
Food $ (200.00)
Child Care $ (160.00)
Utilities $
__________________________
Disposable income $ 1,738.96
Example2: Single mother with 3 children who earns $55,000 per year and receives no government benefits.
$55K Earned Income
Gross Income P/R $ 4,325.00
Child Support $ 500.00
SS and MC $ (330.86)
State Tax $ (113.60)
Fed Tax $ (307.83)
Insurance $ (250.00)
__________________________
Total Net Income $ 3,822.71
Housing $ (975.00)
Food $ (500.00)
Child Care $ (2,400.00)
Utilities $ (200.00)
__________________________
Disposable income $ (252.29)
Here is where the fun really starts.
Example 1 qualifies for the earned income credit. The max earned income credit benefit for a single income earner with 3 children is $5,891.00 per year. Example 1 also qualifies for a dependent care tax credit of $556.80 per year giving her an additional $6,447.80 of disposable income each year.
Example 2 does not qualify for the earned income credit. Example 1 does however qualify for the dependent care tax credit which will give her a tax credit of $1,200. The $1,200 is still not enough to cover her monthly deficit of $252.59.
ChadAmberg
01-09-2013, 11:47
My wife used to work at a program designed to get the generational welfare folks jobs. She was supposed to counsel them in resumes, interviews, help them look for jobs, etc. She came out of that job months later with the opinion that they should be put down.
I want to know why example #1 gets any assistance at all? She has a job. Pay your own damn bills! No one said you are guaranteed a life with ample disposable income. You want more money? Work for it. This kind of shit gets my blood boiling. Every time I look at my pay check and see the incredible amount of money stolen from me and my family for the "social good", I think of the rat bastards who sit on their ass all day and sponge. I hope they choke on it.
Kraven251
01-09-2013, 12:56
seen on a variety of forums, or some variant : Taxes you are doing them wrong...
An answer to the question, 'Do you have any dependents?',
LIST....... '12 million illegal immigrants, 10 million crack heads,
20 million unemployed too lazy to work, the entire cast of The Jerry
Springer Show, 30,000 people in penal establishments in Missouri, 2
million leftovers from Katrina, half of Mexico, all of the House of
Representatives, most of the Senate, and Michelle Obama’s trip to visit
relatives in Africa.
Example 2 is not claiming enough dependents.
kidicarus13
01-09-2013, 13:03
The system has been this way (unfair) for quite some time. It's disgusting and helps me understand why some segments in society have no incentive to work harder/longer. As the years pass, taxes will increase... get used to it.
So going to college and getting a degree was a waste of my time then? [Bang]
kidicarus13
01-09-2013, 13:18
So going to college and getting a degree was a waste of my time then? [Bang]
Not a waste of time, you just had to work harder to end up with less than those that don't give a rat's ass. I mean someone has to pay for the entitlements, might as well be you.
So going to college and getting a degree was a waste of my time then? [Bang]
Yes. I'm in the same boat and I have two of 'em....
Is 2400 a month realistic for child care?
newracer
01-09-2013, 13:27
That is why they all have smart phones and drive Escalades.
Shootersfab
01-09-2013, 13:29
This makes me want to throw up! Good info!!!!
So going to college and getting a degree was a waste of my time then? [Bang]
Not a waste of time, you just had to work harder to end up with less than those that don't give a rat's ass. I mean someone has to pay for the entitlements, might as well be you.
Yes. I'm in the same boat and I have two of 'em....
Lewks liek aye wun heir boyz! NOH DEGREAH FER MEAH!
Really though. College is a scam. It's for wealth preservation not wealth creation.
Tinelement
01-09-2013, 13:37
Come on guys.....
We all know example 1 is taking that extra money and putting it in a college fund for her kids, or investing it in their future.
Right!???
[Bang]
When I was making $30,000, my monthly income was hundreds less than example #1's gross income. Must be the difference in dependants.
Is 2400 a month realistic for child care?
For 3 children, yes. $200/week per kid.
When I was making $30,000, my monthly income was hundreds less than example #1's gross income. Must be the difference in dependants.
Well, with 3 kids she would likely claim 4 exemptions. Though my spreadsheet and paycheckcity.com show a monthly pay of 2083 and 4 exemptions in CO to pay about 60 in fed taxes and 31 in state each month. Not going to say what my federal witholdings were last year. [Rant1]
Well, with 3 kids she would likely claim 4 exemptions. Though my spreadsheet and paycheckcity.com show a monthly pay of 2083 and 4 exemptions in CO to pay about 60 in fed taxes and 31 in state each month. Not going to say what my federal witholdings were last year. [Rant1]
But they NEED more money for those kids they CHOSE to have. :)
Is 2400 a month realistic for child care?
Yup. In fact it's about middle of the road. $200 per child per week. If you send your kids to a Primrose or comparable facility it's around $325 per child per week.
Well, with 3 kids she would likely claim 4 exemptions. Though my spreadsheet and paycheckcity.com show a monthly pay of 2083 and 4 exemptions in CO to pay about 60 in fed taxes and 31 in state each month. Not going to say what my federal witholdings were last year. [Rant1]
Example 1 can claim exempt on her W4 and still receive a refund at the end of the year due to EITC and the Dependent Care Credit.
Example 1 would qualify as head of household providing an $8700 standard deduction. Example 1 would also qualify for 4 exemptions at $3650 a pop that equates to $14600. This means example 1 only has around $1700 of taxable income. Even taxed at say 10% that's $170 which would simply be deducted from the tax return of over $6K.
Seems like taxes get a hell of a lot more complicated when you have kids...
Teufelhund
01-09-2013, 13:59
Gub'ment subsidized (voluntary) sterilizations are the answer to this. Wait, what was the question?
Aloha_Shooter
01-09-2013, 14:24
Gub'ment subsidized (voluntary) sterilizations are the answer to this. Wait, what was the question?
Hell with voluntary. Give 'em a reversible implant along with the EBT card!
<runs away before being swarmed>
No, I'm not serious. Yes, I realize the vast Constitutional problems with mandating medical treatment.
we are a low income family so our daughter is on chp+ (state run health care) every single time we goto the clinic we have the worst car in the parking lot we own a 97 poop brown accord it's nice but there is nothing in the lot under a 2005 ever..... these are the same family's with I phones and iPads in the waiting room.....must be nice
we are a low income family so our daughter is on chp+ (state run health care) every single time we goto the clinic we have the worst car in the parking lot we own a 97 poop brown accord it's nice but there is nothing in the lot under a 2005 ever..... these are the same family's with I phones and iPads in the waiting room.....must be nice
You can afford to go to the doctor? Must be nice.
You can afford to go to the doctor? Must be nice.
i cant my daughter can :D
jackthewall81
01-11-2013, 10:18
Yes. I'm in the same boat and I have two of 'em....
So do I... This country sickens me.
I read all of these threads and I get so angry. I have been working my ass off for the last 10 years and make sound financial decisions. I have earned several promotions and have seen a steady increase in gross earnings, but I have noticed that it translates to almost a zero increase in disposable income. The harder I work the more taxes I pay and my quality of life seems not to change. I am extremely motivated and cannot sit still for the thought of not being productive is about the worst feeling I can think of, but in this financial environment I am beginning to self doubt my desire to contribute any further. If I am feeling that way, how do less motivated people feel when confronted with information like this? Like the OP said this information is all over tons of other threads and everywhere on the internet.
One thing though, this is a problem that has been developing for a long time. It has been identified and the source is known. The source of this problem is election politics basically buying voters. The more people in this dependent position the more people you can sway through words and legislative policy. So now that we have identified the symptom and they source, what is the remedy or solution? This is what we all need to do more. Identifying the enemy is 1% of the battle, defeating them is the only way to move forward.
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