The cost of being poor

[jeffrey]

Infograph on the cost of being poor

[snshijuptr]

I think my favorite fact about tax cuts is that if you cut taxes for the lowest income earners, almost all of those tax cuts end up as spending. It's the same as how UI always gets spent. The trickle down effect relies on the wealthiest Americans looking forward to a more prosperous society. The trickle up effect relies on the poorest Americans needing food, clothes, and housing. Which do you think increases the velocity of money?

[disneysteve]

Originally Posted by snshijuptr

I think my favorite fact about tax cuts is that if you cut taxes for the lowest income earners, almost all of those tax cuts end up as spending.

That makes sense. Boost the take home pay of folks who are struggling and they are going to spend the extra money to better their lives. On the other hand, cut the taxes on someone who is already comfortable, like my wife and I, and we will put that extra money into additional savings. We already have everything we need and most of what we want. If you doubled my salary tomorrow, we wouldn't make any drastic changes to our lifestyle. We might travel more or stay at nicer places when we do travel. We might eat out a bit more, though probably not. We might upgrade a couple of things around the house. But we wouldn't go on some massive spending spree because there isn't that much on our want list.

[Frugal]

Thanks for sharing. I liked that it mentioned that you save money by buying food from a larger grocery store in terms of square footage...good tip! I think of Walmart or the larger grocery stores, and how they charge less than smaller stores, generally.

Do think the gov't has no idea. People can't live (a household of two) on $14,000 odd dollars a year. That is a joke. There is no way you could survive on that in the average, non-government subsidized HOUSE or even apartment. You simply could not make rent payments, utilities, and buy food. I think they should raise the limits on the poverty guidelines. Inflation is eating into most peoples' budgets, and every dollar they make now buys less food, etc.

[SteveBlissLaw]

Pretty well designed diagram. I too find it funning that those taxes are always attributed to spending. It should not be suprising though lol