July 29, 2011

"The entire two-income trap... is actually a two-income tax trap..."

Explains Todd Zywicki, correcting Christopher Caldwell, who was explaining Elizabeth Warren.
... Caldwell’s interpretation of what Warren and Tyagi wrote is an eminently reasonable mistake – the distinct impression left by the discussion in the book is that households are paying 25% more in taxes. And virtually everyone who has read the book has interpreted that central point the way Caldwell does. So I do not fault him. The problem is the way that particular piece of data is presented in the book. What begs explanation, of course, is why that piece of data – and that piece alone – is presented differently from all of the other data, especially when Warren and Tyagi seemingly had to go out of their way to present that data in a distinct, non-intuitive, and somewhat obfuscatory manner that virtually invites the misimpression that Caldwell and most readers have drawn as the central conclusion of the book.
In fact, based on their data once the math is done the real conclusions of Warren and Tyagi are inescapable and in fact (as Caldwell will be pleased to know) extremely conservative: the financial problems of the middle class are caused by an astonishing rise in the tax burden on middle class families over the past three decades.  Nowhere, however, will one read Professor Warren advocating income and property tax cuts as the obvious policy implication of their book–although that is unambiguously the logical inference.
Via Instapundit.

The 2-income family gives a shocking amount of the extra money they scramble to earn to the government. I'm no tax expert, but my suspicion is that this happens because liberals like more taxes and conservatives like subsidizing the traditional family with a stay-at-home parent. Put those 2 forces together and we get the (perverse?) burdening of the 2-earner family.

Why don't more couples do the math and figure out that they should not do all that extra work for the government? Life is so much simpler with the 1-earner family, and the spouse who doesn't bring in the dollars can provide great economic benefits by directly performing work that would otherwise have to be paid for, most notably child care. Since this economic benefit isn't taxed, it's a double benefit. Instead of buying inferior childcare (or other services) with after-tax dollars, you perform the work that is worth that much money, and you're not paid, so you don't pay taxes on the value it represents.

When I went to junior high school, we girls were required to take a course called "Home Economics," but it was just learning to cook and sew. I think young people should be taught a course called "Home Economics," which teaches a sophisticated analysis of the economics of living together and sharing money and work. But perhaps the government, through its schools, does not want to reveal the amazing secrets of legal tax avoidance. How much better to indoctrinate kids to seek the highest incomes they possibly can achieve! That is the government's strategy for raking in the most taxes. And it works so well. The liberal teachers support the ideology of women working and don't want to tip off young people that the traditional 1-earner family is an excellent approach to personal wealth. And the liberal legislatures don't want to alleviate the tax-burden on the 2-income families, because they love raking in the tax money. 

I'm just riffing on a theory here. I'm no expert. I'm just setting up a debate here.

122 comments:

Patrick said...

I'm no expert either, but I wonder what the definition of "middle class" is. On the main story of the day, I hear that so much of the country actually pays no federal income tax. the middle class then, must be paying at higher rates on more of their income. I wonder what the margin is, i.e. where does the big increase kick in? Maybe I could read the story and find out. But I've heard this before, I don't doubt it's true. I think one big reason for two income families is not economic, it's feminist. for a long time women heard how shallow life is as "just a housewife."

Man, things have really gotten better since then.

LilyBart said...

....and conservatives like subsidizing the traditional family with a stay-at-home parent

Excuse me? True fiscal conservatives want small government that frees people to make their own choices. They don't want people subidized or taxeed by the government based on these choices

David said...

You don't need to be an expert to figure this one out. Elizabeth Warren is an expert, and just about every idea she has is a disaster.

The point is simple. Government wants your money. They will take all they can. They spend all of your money they get, plus the money of children not yet working and even the unborn.

Hidden in the tragic Norway news was the fact that Norway has a sovereign wealth fund of over half a trillion dollars--over $110,000 of assets (not debt) for every man, woman and child in the country.

John said...

I would like nothing better than to be a "house-husband," and cook, clean, and take care of the hypothetical kids. And, since I have a bachelor's and Master's degree in music performance, I can teach lessons in my home to make extra income. I just don't think my boyfriend would go for it, though...

Aloha Johnny said...

When you live in the a high tax state like CA or NY the combined marginal tax on second income can easily reach 45% to 50%. Add to that childcare costs, house cleaning, nicer clothes, dry cleaning, more take out and dining out, and you might net 25% of the second income if you are lucky. Add the chaos in the family life, they crises when a kid is sick (who leaves work?), the missed ball games and very often the second job makes no sense.

glenn said...

My wife went to work at 15 and if she hadn't been working (with about a 7 year break to have the kids she'd have gone crazy. I worked till I was 68, my wife is 66now and still has a couple of PT jobs. Hard to imagine her not working. It's not always about the money or the taxes.

Dust Bunny Queen said...

When I went to junior high school, we girls were required to take a course called "Home Economics," but it was just learning to cook and sew. I think young people should be taught a course called "Home Economics," which teaches a sophisticated analysis of the economics of living together and sharing money and work.

Me too. However our course also included budgeting for the household and shopping for food.

All students (boys and girls) should be required to take a course like this in basic living skills.

Cooking, cleaning, basic household maintenance. Financial stuff like budgeting, credit, loans, checkbook balancing.

In olden days children learned these skills from their family, mothers and fathers. Today we have generations of people who have been bred to be helpless and to rely on the government and have NO skills to teach. It is much easier to control a population that doesn't know how to fend for itself.

bearing said...

I completely agree. People must be chasing intangibles such as personal satisfaction, and there is nothing wrong with that, although I suspect they don't always realize the true cost of their self-satisfaction.

I'm heavily biased, as I have an advanced degree (more advanced than my spouse's) in a generally lucrative field, and I'm performing the economically valuable service of homeschooling four children.

It goes far beyond the money we save in tuition (because we would be sending the kids to Catholic school if I wasn't homeschooling, I do count that tuition we don't pay as tax-free income!). Because I don't work, I don't have to juggle a travel schedule with my spouse's business travel schedule, and he's quite free to schedule projects efficiently or work late if necessary. I'm convinced that flexibility contributes to his economic value at work and ultimately to our income.

Another friend of mine, also a stay-at-home mom, managed to rake in, this year, five or six figures in tax free "income" during a home remodel by spending all her free time sourcing scrap and used building materials. Good luck doing that with a full time job.

Often in the morning, before I wake the kids, I step out on the front porch, sip my coffee and watch other folks racing off to work. I have been home with children for almost eight years now and that sight always energizes me.

Trapper Townshend said...

I would like nothing better than to be a "house-husband," and cook, clean, and take care of the hypothetical kids. And, since I have a bachelor's and Master's degree in music performance, I can teach lessons in my home to make extra income. I just don't think my boyfriend would go for it, though...

Ha! Same here, except my degrees are in English and creative writing. Maybe I could polish kids' college application essays.

Andrea said...

I never took home ec (my high school let you take an art course instead which is what I did), but as I understood it from some rather younger (by about ten years) friends of mine who did, the home economics course in the 80s was much more comprehensive than the "cooking and sewing" of earlier decades. My friends mentioned learning to balance a home budget and things like that. You can even take it in college.

Fred4Pres said...

I am willing to be the stay home spouse, provided my wife keeps me well and takes care of all my needs!

Scott M said...

All students (boys and girls) should be required to take a course like this in basic living skills.

I was talking about this very thing with the wife a couple weeks ago. I'm the book-balancer in the house and, as such, I have a rock-solid process for receiving, budgeting, paying, and filing bills and expenses. It may not work for others, but it does work for me.

The idea I had was to create the same system for my kids when they hit high-school and need to start learning household budgeting. I intend to set up a system in which they get an actual "paycheck" from a dummy company I create in Quicken, but then have to pay bills like power, water, groceries, etc to the various dummy utilities I set up. It's going to be up to them to both budget for and pay the bills.

It's only a concept, currently, that my wife and I are brainstorming. The goal isn't to burden our kids and make their life hell. The goal is foment a bill-paying habit that will serve them well once they move out on their own. It took me the better part of my 20's to figure it out for myself and I got into trouble over it.

Ann Althouse said...

"... I wonder what the definition of "middle class" is. On the main story of the day, I hear that so much of the country actually pays no federal income tax. the middle class then, must be paying at higher rates on more of their income."

Remember in the 2 income family, if you are actually married, it's harder to stay down at the level where you don't pay income tax. Either it's added together for joint filing, or, if you file separately and pay a higher rate. BTW, this is a motivation for the federal government to recognize same-sex marriage. Lots of those folks are 2-income couples. Why should conservatives give those people a tax break? Liberals have a double reason: gay-rights + more taxes. (Other benefits cut the other way though.)

"True fiscal conservatives want small government that frees people to make their own choices. They don't want people subidized or taxeed by the government based on these choices."

Great, but where are these people? I'm saying there's an incentive to vote a certain way for conservatives. I'll believe the flat tax when I see it. Meanwhile, there are lots of tax breaks, many of which are supported (or tolerated) by conservatives.

If liberals want to burden "their people," that's a good place for conservatives to "compromise" with liberals.

E.M. Davis said...

My wife's current income is basically useless, given what we pay in child care and to the government.

However, she works for Ohio State University (I know, a "state" job) and can go to school for free. She just took her GRE and is going back for a Masters.

With that, she should be able to improve her income greatly.

Ann Althouse said...

"When you live in the a high tax state like CA or NY the combined marginal tax on second income can easily reach 45% to 50%. Add to that childcare costs, house cleaning, nicer clothes, dry cleaning, more take out and dining out, and you might net 25% of the second income if you are lucky. Add the chaos in the family life, they crises when a kid is sick (who leaves work?), the missed ball games and very often the second job makes no sense."

I think in many cases the net is negative, even at the pure money level. If you add all the trouble of actually doing the work, having a complicated schedule, the possibly inferior care for your children, and the diminished quality of life in terms of social and family event and good cooking, it's a disaster.

Scott M said...

Ha! Same here, except my degrees are in English and creative writing.

Since Borders is going tits up, and it was only $6 (marked down from $18 or so), I picked up YOUR FIRST NOVEL IN 90 DAYS. Yes, I expect it to be complete crap, but the exercises contained therein looked intriguing.

THAT'S what I would like to do. Take care of the house, the kids, and crank out a couple of novels. If you beat the little rugrats enough, they don't bother you much while you're trying to write.

Ann Althouse said...

"However, she works for Ohio State University (I know, a "state" job) and can go to school for free. She just took her GRE and is going back for a Masters. With that, she should be able to improve her income greatly."

Yes, clearly, you have to look at the long term home economics.

Also, both spouses may have work with great intrinsic and extrinsic value. But if either is working mostly for the money...

E.M. Davis said...

Great, but where are these people?

Right here.

I'd love to eliminate all deduction, loopholes, incentives and just pay a simple lower rate, or a flat tax.

But getting to that would be nigh impossible.

Both sides of the political aisle have rigged the tax system to engineer all sorts of behavior. It's stupid.

G Joubert said...

An argument for dual-career couples who want to get married to get "spiritually married," and to not get a "license" from the government.

AJ Lynch said...

Elizabeth Warren is not very smart for a Harvard professor.

And far too many govt programs [like college aid] reward people for making less money than other familes. How many times, Althouse, have you heard a mother with kids in college say "why should I go back to work when the add'l family income will reduce the college aid we get for the kids?"

ricpic said...

How conservatives can be blamed for the insane growth of government and consequent tax burden is beyond me.

OT - Fred, sorry about the misunderstanding. Of course I wasn't put out by your kidding about Irving. I plead guilty for using the wrong emoticon. ;^)

E.M. Davis said...

Also, both spouses may have work with great intrinsic and extrinsic value. But if either is working mostly for the money...

And, if she didn't work outside of the home, I think she'd be certifiably insane by now.

Andrea said...

"My wife went to work at 15 and if she hadn't been working (with about a 7 year break to have the kids she'd have gone crazy."

My mother was the same way. Once we kids were old enough to go to school, she was left at home all day with nothing to do. There weren't any neighbors to talk to -- they were all Cuban, and my mother didn't speak any Spanish. She was bored out of her mind, sitting around watching soaps all day. So she got a job as a secretary at HRS and was much happier.

But I think the thing is she had always worked -- her family was poor and she grew up during the Depression in a small town in Tennessee -- and also had always worked outside the home. It's what you're used to. The trick is not to become the stereotypical Betty-Friedanesque housewife sitting around your perfect house not doing anything, but to have some activity that even if it's not a conventional "career," is at least meaningful to you. It could just be a hobby, or it could working from home. The 9-to-5 five-days-a-week office job is a recent invention, of the past hundred-fifty years or so. It's not the only "real" way to work.

Pogo said...

The power to tax is the power to destroy.

That taxes on the two income family have risen to the level that it is destroying them may be accidental or intentional, but destroy them it will.

It is reasonable to ask our overlords why they hate us so, and why they want to destroy us.

Ann Althouse said...

"THAT'S what I would like to do. Take care of the house, the kids, and crank out a couple of novels. If you beat the little rugrats enough, they don't bother you much while you're trying to write."

That describes my first marriage. I have one piece of advice for you if you go down that road: Do not get divorced!

Which reminds me, one of the big lessons of feminism was that if you are the stay-at-home wife, your husband may leave you, and you won't be able to get a decent job, so don't let yourself get set up like that. Have a career. That has been a huge message to women over the last 40 years. It was not the message when I was growing up. I would have loved to have been all about love and children in the home while the husband took care of bringing in the money. That's what I grew up assuming would happen. But then came the Vietnam War and the hippie movement and traditional family life seemed all wrong. The women's movement moved into that space and became an alternative, but it was too much about money, and I regarded it as middle class and square. We were counter-culture rebels, somehow able to live outside of normal economics. In the end, I went to law school because I was interested in learning something challenging and because I wanted to have children. I had my first child in my 3d year of law school and my 2d child 2 years later. My husband stayed home with the children. We never used childcare.

(After I became a law professor, in 1984, I reconnected with feminism, which, at the time, was no longer the square middle-class feminism of Ms. Magazine and NOW. It was the radical feminism of Catharine MacKinnon and Andrea Dworking.)

Ann Althouse said...

"If you beat the little rugrats enough, they don't bother you much while you're trying to write."

As for the extent to which that describes my first marriage: 1. We didn't beat them. 2. Kids do bother you exactly when you try to write. Your sitting down to commune with the computer screen is a warning signal to them to demand attention. If you haven't tried to live the life of a writer with 2 little kids, you don't know how frustrating it is.

On the other hand, if you think divorce will be a better way to live, you're making the mistake of a lifetime.

Harry said...

Let's not forget the related benefits that flow from a second job, such as health insurance and retirement savings.

I agree that often one is left with little of the net income from the second salary after paying taxes and other expenses, such as childcare.

But, for instance, my wife continued working despite "taking home" $10 a month from her job after paying for benefits and childcare. Otherwise, we could not have afforded health insurance (because my plan was ridiculously expensive to cover dependents, while hers was excellent). Plus she would have given up a substantial 401(k) matching contribution.

John said...

Good idea about the home economics course.

But why not take it a step further and teach general basic economics in high school?

How to do a cost benefit analysis. Supply demand curves. What money is and how come it has value in some countries and not so much in others eg; Zimbabwe.

Maybe then our kids would grow up not swallowing the crap the politicians tell us.

Oh, wait. I just answered my question about why economics is not taught.

John Henry

Ann Althouse said...

Dworkin, not Dworking.

SarcastiCarrie said...

The two-income trap is the cause of the end of the traditional family. So many couples at the margin opt not to marry when having kids together (and buying homes and living as a family) because of the higher tax burden when you have to file as married. Many of the lower income day care workers I knew lived with their "fiances" for 10-15 years, had kids, bought houses, but never married. The woman filed as head of household with one of the kids, the man did the same with the other kid, one of them claimed a standard deduction, the other (with the larger income) claimed the itemized expenses (mortgage interest, property taxes, charitable giving, state income tax on the larger income).

The second income is only a burden if it's not very big. My husband and I are equal earners, so it's not really clear which income would be the one to forego. As it is, we both work and go out to dinner far less often than when I didn't work (there just isn't time for that after we both get home). We also do a lot less take out since it's difficult to pick it up with kids in tow. I just use the crock pot a lot and cook on the weekends to heat up leftovers during the week.

Trapper Townshend said...

Which reminds me, one of the big lessons of feminism was that if you are the stay-at-home wife, your husband may leave you, and you won't be able to get a decent job, so don't let yourself get set up like that. Have a career. That has been a huge message to women over the last 40 years.

I wonder how much the prepare-in-case-of-divorce, it-might-happen, never-forget-that mindset led to an increase in actual divorces. If you're constantly countenancing something as a possibility for yourself and your life, how much easier does it become to choose that option when faced with unpleasantness or dissatisfaction?

I'm not saying that the prospect of women left destitute by husbands who abandoned them is appealing to me. I'm not saying that the old ways were good, only that I wonder about the new ways, and what they've brought with them.

MarkW said...

Why don't more couples do the math and figure out that they should not do all that extra work for the government? Life is so much simpler with the 1-earner family...

So much simpler, maybe, if the spouse with the job has a government position with iron-clad job security. But for people working in private-sector jobs, dual-careers provides important redundancy.

What more couples should do, I suppose, is get divorced, cohabitate, and pay income taxes as single people.

rhhardin said...

The marriage penalty goes in and out every couple of generations.

The mathematical fact is that you can't have both of two desireable things

1. Families earning the same total income pay the same total tax;

2. Tax law is indifferent whether you're married or not.

You can't do both of those at once with a progressive tax code.

So every couple generations the tax law changes from the way it was to the other way.

The solution which will never happen is a flat tax.

Jessica said...

I just left BigLaw to be a stay-at-home mom. (I went to a top 10 law school and did two federal clerkships as well.) My husband is also a BigLaw attorney, and we figured that after taxes, and the costs of childcare, commuting, wardrobe, and eating out almost ever night, I'd be working for around $10 an hour. So not worth it, especially considering that our life is so happy and unstressed and calm now that I'm home to be a mother and hold down the fort....

lyssalovelyredhead said...

I completely believe that it is ideal for only one parent to work or at least only one parent to have a demanding career-type job. My husband and I have always planned for him to stay at home; it was instrumental in our decision that I would go to law school (ha! how'd that one work out?) I find that most liberal-"feminist" types, including may of my classmates in school, appear outraged and appalled at the idea.

Then they go on to lecture me about how workplaces need to be less sexist, by which they mean give more stuff to women to cover their parenting responsibilities, because obviously they can't expect their "equal" husbands to do something like parent a child or care for a household.

- Lyssa

roesch-voltaire said...

In one sense this is an argument for better state/business supported day care centers along with flexible work arrangements. For example Johnson &Johnson reported savings of more than $4 for every $1 invested in work/family programs including child care resources. Another example, my relatives in Japan pay only $500 per month, in for child care that extends into the night while the father, my brother-in-law, runs a restaurant and his wife works at Hermes. And maybe this is also another reason why Bush's second tax cut for the rich should not have gone into place. In any case this is less an income tax trap, and more an example of how we do not support working families.

Scott M said...

(After I became a law professor, in 1984, I reconnected with feminism, which, at the time, was no longer the square middle-class feminism of Ms. Magazine and NOW. It was the radical feminism of Catharine MacKinnon and Andrea Dworking.)

Someone go wake up Crack.

Seriously, though, Ann, I'm absolutely blessed with the strongest woman I have ever met as a wife. My father, who's bride saw him through raising three boys, a dangerous military career (E.O.D.) and the failure of a business, always told me if I found someone half as strong, snatch her up...and I did.

While she quips that not working would drive her nuts, I know for a fact that she would rather be one of those wives that worries over the house and kids while organizing everything in the neighborhood and, for us, the church that isn't nailed down.

If daycare and college debt didn't eat up such a large chunk, that's probably exactly what we'd be doing.

bagoh20 said...

I don't think that homemaking is as much work as it used to be due to technology and the amount of stuff now done by government "for the children". Even 40 years ago, my mother was able to do all the homemaking for a family of 6 and hold down a 40 hour man's job.

Now, if wives (or husbands) did the homemaking, homeschooling, home repairs and gardening then we have a real job there. That is quite doable and would be worth the loss in income.

Now if too many people did this, the government will still want it's money and will simply resort to getting it some other way like taxing by the toilet flush.

Scott M said...

If you haven't tried to live the life of a writer with 2 little kids, you don't know how frustrating it is.

I can't even write with music in the background, let alone constant tugging at my shirt.

lyssalovelyredhead said...

Which reminds me, one of the big lessons of feminism was that if you are the stay-at-home wife, your husband may leave you, and you won't be able to get a decent job, so don't let yourself get set up like that. Have a career. That has been a huge message to women over the last 40 years.

I've heard that a lot, particularly from fellow women in law. I find it shocking that a woman would marry, much less reproduce with, a man that she thinks could under any circumstances be capable of not just leaving her, but running off with the money and leaving her and their children destitute and without support.

- Lyssa

Dust Bunny Queen said...

(dang...posted on the wrong account ..reposted)

Having recently stepped from a two income to a one income household, I can say that not only do we seem to have more discretionary income, our lives are more peaceful and content.

I no longer have to deal with the mechanics of running my own business, the overhead, licensing, prospecting, countless hours of preparation and the worry of my profession.

Since I no longer have to 'work' my personal expenses have gone down. Clothing, commuting, lunches out.

Our household expenses have also gone down since I know have more time to cook from scratch (which I dearly love to do) and buy less convenience type foods.

As to being bored with no "JOB" there are plenty of things to keep me busy and LOTS of social interaction. Hobbies, gardening, community work. I can finally join some of the clubs that I was never able to join before because I was too busy. I wish I had been able to stay at home when I was a parent with younger children....but that was not to be.

We are fortunate in that my husband's business is doing well and he is in demand. Really hard to outsource your plumbing and water system, well needs (knock wood).

As long as you have one partner who can carry the financial work load and who loves his work (doesn't feel like the rented mule), and the stay at home spouse is carrying their load of the partnership..... the one income earning family can work.

Scott M said...

Then they go on to lecture me about how workplaces need to be less sexist, by which they mean give more stuff to women to cover their parenting responsibilities, because obviously they can't expect their "equal" husbands to do something like parent a child or care for a household.

As I told my extremely liberal and arch-feminist sister-in-law, each person is a pie chart that only adds up to 100% no matter what bullshit you swallow in Womyn's Studies courses. You simply only have so much ability, so much time in a day, and so much in the way of resources to dedicate to job and family.

Combine that with the fact that, currently, scientists haven't figured out time travel yet and the budding Xena is left with days juggling everything (meaning everything gets less attention) that she'll never get back, no matter how many times she tries to bugger Apollo.

Scott M said...

For example Johnson &Johnson reported savings of more than $4 for every $1 invested in work/family programs including child care resources.

Yes, but Johnson & Johnson employees are just hapless meat puppets who's only job is to kill or be killed, right, RV?

Is your ivory tower carpeted or did you stick with the tile?

Levi Starks said...

This is exactly how My wife and I have lived our lives.
When she got pregnant with our son 24 years ago she quit her job and hasn't worked since. unless you count the fact that she's been the poster mom for being what a mom used to be. After our son started school she began a career of taking care of a succession of babies, and young children of relatives, and close friends. This fall she will be caring for a Great niece who's mom is starting her first full time HS teaching job. When my dad could no longer live alone it enabled us to care for him in our home for the last two years of his life. The value of that was enormous, both spiritually, and financially. It's also allowed me to be the best employee possible. 15 plus years of perfect attendance. I'm a tool and die maker, you'd call that blue collar. We've never had a bounced check, our home is paid for, it really doesn't get any better.

bagoh20 said...

"I find it shocking that a woman would marry, much less reproduce with, a man that she thinks could under any circumstances be capable of not just leaving her, but running off with the money and leaving her and their children destitute and without support."

Well it sure does happen a lot, except that if the man makes any money, he will be forced to support them.

But we all get fire insurance on our homes even though a fire is a lot less like to happen than a broken marriage.

Nobody should put all their eggs in a basket another person can carry away.

Geoff Matthews said...

Two-income families can afford homes with good schools that may not be affordable for one-income families.
Sometimes, mom goes to work so her kids aren't in a school that requires an on-site police officer, or a school that spends more time on discipline than instruction.

edutcher said...

One thing to keep in mind is that most women have a job, not a career or profession, because the family needs to make ends meet, due to the high state of taxes and regulation. Both spouses working is a necessity and anyone wondering why the Lefties like the idea is that is the two income family pays the burden of the Earned Income Credit crowd (somebody has to). The creation of as big an underclass as possible is vital to the Lefties staying in power.

Ann Althouse said...

I think young people should be taught a course called "Home Economics," which teaches a sophisticated analysis of the economics of living together and sharing money and work.

A simple course called Mathematics would do the same thing, but they don't teach that, either.

BTW, this is a motivation for the federal government to recognize same-sex marriage. Lots of those folks are 2-income couples.

They wouldn't make that much money if many of the partners can't work due to AIDS, which would be the case since it's the only real motivation for this in the first place.

PS What LilyBart said.

aronamos said...

Bah. Now that the kids are grown, and out of the house, my check is going into the bank/401k/IRA and the bills for the weekend house, and we're living on my husband's pay. No way we're counting on social security. Not working through their childhoods would have kept me from making the kind of coin I do now.

And they gew up fine, other than being Democrats.

master cylinder said...

The kids do take Home Ec. My son in middle school took something called "Skills for Living" and loved it.
Oddly constructed argument that somehow the liberal agenda at work- covering up the real tax situation -
is preventing traditional family models with stay at home moms. I would venture to say that most are reacting to a need for more money. The people who can live happily on one income are not typical earners. If you look at an average [middle class male salary-55k] it's doable for a family of 4, but not a lot of frills.

SunnyJ said...

Everyone posting describes their own individual twist on the method of home economics. Great read to see how so many here have made it work...and by the sounds of it, are very happy.

@althouse says: "Dworkin not Dworking" And, I think for once Sarah Palin got it right, you're supppose to drop the "g"!

Me: Single professional mom paying $20,000+ for 19 yr old daughter to attend private WI college, farm payment etc. and payed over $12,000income tax on $80,000 income.

Her friend has a free ride to same school, parents live in 2 separate reduced income apts, mom makes $13/hr, dad on disability. Pay no income taxes.

I am paying for her and for him.

roesch-voltaire said...

Scott, my ex-students who work at Johnson & Johnson seem quite happy with the salary and the family support. While I work in a department with three working mothers, I realize the academic setting is more supportive and flexible than many places, but my point is that more work places should provide flexible scheduling and child care. For those women who want or need to work, especially after their children reach the school age, they should have that option. As an aside, while divorce is never as easy as it looks, especially for children, sometimes it actually forces the father to take a more active, supporting role, it did in my case, thus freeing up the ex-wife to pursue her career where along with child support, she can manage quite well.

Scott M said...

D'OH!

Sincere apologies, R-V. That was snark in relation to a comment by Robert Cook a couple days ago. I hope you can understand the mistake.

When snark goes bad, it goes very bad.

Sloanasaurus said...

Consider this. If you are creeping into the 25% tax bracket, your spouses incremental income will all be taxed at that level. Say the spouse is able to earn $20 an hour or $40,000 per year in gross income.

The tax on that is as follows
Fed Marginal tax at 25% $10,000
State tax (net fed ded) at 5% $2000. FICA tax at $3060. Total Tax is $15,000 or a net gain of $25,000. or an effective tax rate of 37.5% on the additional income earned by the spouse. If child care is required - say at $10 per hour. Your total cost for the the year is $20,000 less the $1500 tax break, Thus after child care, the spouse would net about $6000 or $6 per hour. This analysis excluding all other costs of working (transportation, clothes, etc), assume you have

Dust Bunny Queen said...

my point is that more work places should provide flexible scheduling and child care.

That is all nice and good in theory and perhaps applicable to some large companies, however....in the real world businesses do not generally have the luxury of flex scheduling or the resources to provide babysitting.

If the government gets into the business of demanding those services, expect even MORE small businesses to just give up and shut the doors.

These types of utopian ideas always come from 'academics' and people who have never had to run a business and probably have never held a real job that wasn't cosseted and supported by government.

AllenS said...

Here we go again, the poor don't pay Federal income tax. What about me? I made $13,348 last year, had a taxable income of $3,998 and paid #303 in Federal tax. My income taxes were done using TurboTax.

Am I not considered poor?

AllenS said...

#303 = $303

roesch-voltaire said...

Dust these are hardly academic idealist ideas, and you can check out The 100 best companies for working mothers to discover the places that want to help bright capable women because it improves their bottom line.

virgil xenophon said...

The (very real) replacement costs to pay for the jobs/multi-tasking that stay-at-home spouses (STILL usually female) do has long been one of the big selling points used by Life Ins agents to justify large amounts of LI on the non-working spouse if young children are involved.

Dust Bunny Queen said...

@ Alan

Was that $303 income tax or social security and medicare? How about your earned income credit?

Yes, your income is low and at some point there should be a break off point. However, currently people are making 3 and 4 times what you are and still not paying any income taxes.

Also.....there should not BE any earned income credit where people get PAID money from other taxpayers for not working or having low income.

If the government wants to be in the charity business...get the money from VOLUNTARY charitable contributions to the fund and not by robbing me so other people can get FREE money.

rant over.

Freeman Hunt said...

Look at the wise on Althouse.

Freeman Hunt said...

The last time I got the "You should have a career in case your husband runs off!" advice, it came from a woman who followed that advice and then ran off from her husband.

Dust Bunny Queen said...

Dust these are hardly academic idealist ideas, and you can check out The 100 best companies for working mothers to discover the places that want to help bright capable women because it improves their bottom line.

Wooosh....right over your head.

You entirely missed my point. For some LARGE companies those ideas may work.

So let me type reaaaalllly slowly.

In the rest of the business world, smaller companies....not Fortune 100 not even Fortune 500..... flex scheduling is not often feasible because they have a smaller workforce or they just can't because of the nature of the work.

And they don't have the resources.....in layman's terms money...to pay for babysitting. It would put them....out...of...business.

Ivory tower ideas work in the ivory towers. Try to force it on the local trucking company or restaurant or landscaping service and see how well that works out.

^THIS^ crappola is why we do NOT have employees, even though we could employ several people. Sub-contract and outsource only. 1099.

Phil 3:14 said...

The linked article was fascinating and the comments even more so. This comment caught my eye.

A very liberal friend of mine was explaining to me the other day that people who try to avoid paying taxes — Republicans and Tea Party types — are unpatriotic and screwing over the country. I guess my wife and I are two of those bad people now. Being a traitor never felt so good...

Anyway, I do think Zywicki underplayed to "living up to your income" aspect of this comparison. (Though to be fair he was critiquing the book, not a broader reality). Several commenters pointed out that just because you now make double the income doesn't mean you need to have double the house, or double the transportation etc.

So it the given is that you do have to life the income the increased taxes (of a progressive tax system) will be the thing that will push you over the top.

AJ Lynch said...

SunnyJ:
Your example is why I favor a stipend system [with the exact same amount for everyone no matter how much money the family has] if the govt continues to to be involved in helping to pay for college.

Phil 3:14 said...

It occurred to me yesterday after I'd heard something about the rich and what they buy that "Its a good thing that higher income folks want to buy luxury goods". I mean a Coach purse is really no better than a Walmart special. So the extra dollars they "give away" go to that supply chain that brought her the Coach purse.

So we shouldn't begrudge the millionaire who buys expensive suits and luxury cars. We should thank him for giving "us" some of his wealth.

(Besides the extra taxes he pays buy me that "cool" hi-speed train I've always wanted to have.)

Freeman Hunt said...

The one I most often hear now is, "When they're older and can be away more, that will be good. Then you can pursue your own life," the assumption being that acting as a stay-at-home mom is not part of my life but rather some kind of pause during which I am a non-entity.

Larry J said...

My wife is a few years older than I am and plans to retire at the end of the year. I'm looking forward to it in large part because of the tax bite. We've worked hard and saved for retirement.

PatCA said...

I heard the same message back then, that you must have a career because a man could just take off and leave you with the kids. Translation: In fact, he probably would because, after all, men are inherently bad. I don't know if these early feminists believed this or exaggerated to get their way.

The legal standing of women was not equal in those days: I couldn't get a car loan because I was a single woman, for instance. A friend of mine could not purchase a washing machine from Sears until her husband, drafted into the service, signed a paper allowing her to. But a few changes in the law remedied that and made marriage more equal, but by that time we had thrown the baby out with the bathwater.

Julie C said...

What Freeman said. I've been an 'at-home' parent for almost 15 years. I have an MBA and left an investment banking job to be with my kids. I've had people say to me "Oh my god I would be so bored all day!" and other stupid things. What those idiots don't realize is that many of us are the ones actually running things in our communities - the schools, the churches, charitable clubs etc. We do all that and make a first class dinner every night, supervise homework and get our kids to all their activities.

I'm not worried about my husband leaving me - we make our relationship a priority and I make sure I don't greet him when he comes home with a scowl and a complaint. The house is clean, I'm looking my best, dinner is almost ready, and we're all happy to see him come through the door.

Heart_Collector said...

The renta centa generation.

lyssalovelyredhead said...

Nobody should put all their eggs in a basket another person can carry away.

Lyssa's rule: Don't reproduce with anyone who you aren't absolutely sure wouldn't walk away with your basket. (In other words, even if you divorce, you know that the man wouldn't leave his own children high and dry. Without having to be forced by the state to do so. It's really not that hard.)

Scott M said...

Nobody should put all their eggs in a basket

Aren't women pretty much born this way? Two baskets, sure, but still..

Michael said...

AllenS: It goes without saying that there are many who make lots more than you and pay no Federal Income Tax. I submit that your interest in politics and in tax matters is due to the fact that you participate in the system and are not quick to want to raise your own taxes by any amount at all. I advocate for a system where every person of tax paying age has to pay, write a check or money order, for $100. That amount should rise and fall with the average rise and fall of all taxpayers. It would change things, I guarantee you.

Freeman Hunt said...

Lyssa's rule: Don't reproduce with anyone who you aren't absolutely sure wouldn't walk away with your basket.

This.

Marry somebody who does the right thing when no one is looking.

Michelle Dulak Thomson said...

Ann,

Kids do bother you exactly when you try to write. Your sitting down to commune with the computer screen is a warning signal to them to demand attention. If you haven't tried to live the life of a writer with 2 little kids, you don't know how frustrating it is.

You don't even need kids to experience this; a cat will do. If I'm doing something non-urgent at the computer, she by and large leaves me alone; but if I'm on deadline, she plants herself between keyboard and monitor, or jumps up to the back of the office chair and keens into my ear until I'm forced to pay her attention.

wv: matte. The finish on the absurdly cheap steel folding chairs we bought yesterday at Target so that we had decent seating for string-quartet parties.

(John, we're not far apart here, except I'm straight & married: both of us are violinists/violists [emphasis on the viola part, and we both play viola d'amore as well]; we relocated last year and I haven't been able to find work yet -- my "day gig" for nearly twenty years has been selling sheet music, and let's just say there are few openings, though there damn well ought to be, because while you can -- eventually -- find almost anything you want from some Web site or other, there's no one there to say NOOOOOO! As to a certain popular collection of easy classical piano music that reworks "Fuer Elise" into duple time.)

$9,000,000,000 Write Off said...

Why not examine whether a woking couple are "buying inferior childcare (or other services)"?. You think a white kid, Stanford undergrad and UW grad cleans a house, landscapes a yard, tends a pool better than a Guatemalan immigrant? Or, the same kid with 7 years of law firm experience raises kids better than Brazilian with 3 kids of her own? Maybe, but definitely maybe not.

Today's college and graduate school educated wife may prefer working, even if after tax income is $25,000, and the man almost certainly prefers it.

Freeman Hunt said...

Today's college and graduate school educated wife may prefer working, even if after tax income is $25,000, and the man almost certainly prefers it.

She might not have sought out the graduate education if she'd figured on staying at home with the kids. So you're really saying women who choose to work prefer to choose to work.

As for men preferring it, speak for yourself. Many men spend a lot of time trying to convince their wives to stay home with the kids. It goes the other way too, with the woman trying to convince the man, if she is the main earner.

$9,000,000,000 Write Off said...

In an otherwise tremendously sympathetic In Defense of Women, Mencken supposes that women would avoid domestic tasks even if they only could, damn the taxes:

Nowhere else in the world have women more leisure and freedom to improve their minds, and nowhere else do they show a higher level of intelligence, but nowhere else is there worse cooking at home [obesity epidemic?], or a more inept handling of the domestic economy [U.S. personal savings rates?], or a larger dependence on the aid of external substitutes [SCHIP, all-day, 12 month public schools?] for the skill is wanting where it theoretically exists.

It is surely no more coincidence that the land of the emancipated and enthroned woman is also the land of canned soup, of canned pork and beans, of whole meals in cans, and of everything else ready made. And nowhere else is there a more striking tendency to throw the whole business of training the minds of children upon professional pedagogues, mostly idiots, and the whole business of developing and caring for their bodies upon pediatricians, playground "experts", sex hygienics and other such professionals, mostly frauds.


Let me add that I don't think he's got the whole explanation, but Mencken is a charming writer, so there it is.

$9,000,000,000 Write Off said...

Freeman- Bad writing on my part. I meant few men really want to stay home with 3 kids and household command, especially after doing it. I don't know how they feel about their wives staying home.

And, yes, I'm just talking about a sector of 2 working parents. The poor have always had 2 working parents (literally, for all of history), though, so novelty is in the wealthier couples.

Ralph L said...

even if you divorce, you know that the man wouldn't leave his own children high and dry
You have to worry about the second wife, too. My step-mother has bled my father white.

Der Hahn said...

I think you're getting Zywicki's point a bit wrong. Truthfully, I've had read several of his posts (as well as some by Megan Mcardle) and it's taken me a while to get this because he's not very forward about it. Since any discussion of the book quickly degenerates into a food fight over whether mothers with young children should work, it tends to get obscured. The latest post is probably the most directly I've seen him state his conclusion.

He's not arguing against the premise of Warren and Tyagi's book that on a purchasing power/inflation-adjusted basis a family of 2 parents and 2 kids needs two incomes to live as well today as a similar family did in 1973 on a single income. His dispute is with the way they obscured the data on tax payments to cover up the fact that the increase in taxes paid dwarfs the changes in the expenses they attribute to needing a second income earner. Obscuring the role of taxes in their calculation allows them to pass off a supposed bidding war for housing as the reason that a second income is needed to maintain a middle class standard of living.

Since taxes vary pretty much linearly with income, it's a misnomer to call this situation the 'two-income trap'. A single earner family of at the same income would be paying a similar amount of taxes since the source of the next dollar of income doesn't matter on a joint return. Removing the second income reduces the family's standard of living without reducing the tax burden proportionally.

If Warren and Tyagi reported the data honestly it would show that we've been impoverishing the middle class to pay for a vastly expanded government.

lyssalovelyredhead said...

RV said: my point is that more work places should provide flexible scheduling and child care. For those women who want or need to work, especially after their children reach the school age, they should have that option.

Then went on to say:
you can check out The 100 best companies for working mothers to discover the places that want to help bright capable women because it improves their bottom line.

So caring for the children really is the woman's problem, that either she must do or find some outside agency to substitute, huh? How delightfully progressive of you.

- Lyssa

roesch-voltaire said...

Dust about resources, I can only add that folks do have more than you realize and you shouldn't limit it. For example when I had two smaller children, I joined together with other young parents to form a coop pre-school that served over thirty working families. We thought of ourselves as resources. My daughter presently works in a food coop, small business, that helps with childcare, and when she is home helping her husband publish their magazine, she is able to call on a baby sitting coop to help when needed. (She did not take an outside job until their daughter was able to attend pre-school) Of course I realize that today it is everybody out for themselves, and as a result folks are isolated, but if there was a common voice that pushed for childcare it would happen. And if governments, as in Japan, wanted to encourage mothers to work, well then....

Scott M said...

she is home helping her husband publish their magazine

Is it poorly xeroxed?

Dust Bunny Queen said...

Dust about resources, I can only add that folks do have more than you realize and you shouldn't limit it.

Woosh again.

Co-ops and banding together with friends and family to share child care is great. THAT is how I was able to do it in my early working years.

However, that wasn't what I was saying.

I don't know how else to rephrase it.

I am saying that small businesses do not have the flexibility or resources compared to a large company to be able to do flex scheduling OR provide babysitting services.

If the government mandates this ivory tower concept, as laudable as those two things can be for the working stiff, the small companies and mom and pop type businesses will likely go out of business.

If you don't have a job, I guess that solves the question of child care and flex hours then, doesn't it.

The last...VERY LAST thing that I would want to see is government controlled child care!!! It is bad enough that we have to put up with our children being indoctrinated in the public school system.

I certainly would not want to see the government get its hands on preschool children so they can warp their little brains, early and often.

AllenS said...

DBQ,

As I had stated I made $13,348 last year, had a taxable income of $3,998.

I turn 65 in November, when I'll be getting Medicare. I am collecting Social Security now, and on the 2nd Wednesday of every month, I receive a check for $1469. I pay no taxes on it, because my other income is so low. When I start receiving Medicare, they will take out about $120 a month from my Soc. Sec. check.

Michael,

I do what I can for the general good. I was drafted into the Army in 1966. I didn't want to go, but at the time, that was a sacrifice young men should make. I lost a job, my apartment, had to sell my car, gave all of my personal items, linen, silverware, pots and pans back to the Goodwill, where I bought everything in the first place. I don't mind paying taxes. My beef is that they keep growing, maybe not in the income tax charges, but overall, property taxes, charges for building permits, and damned near anything that you do commerce wise. It's killing us.

Comments from a poor man.

Allison said...

I think for couples where the two incomes together are in the 100k-150k range, women simply stay working when the baby comes because of cash flow. They cannot figure out how to afford it, and don't realize how little her income was worth in the first place. That is, the two income tax trap comes BEFORE the child does: they got married, and they got used to two incomes contributing nothing but cash flow, and haven't realized it. So she should have been a stay at home wife or he a stay at home husband, but that's completely out of bounds to think of anymore. And then, the child deductions, the child care credits actually drive their taxes down, so they don't notice how bad it was.

For those who make more, like $250k jointly, it's more noticeable, since those tax breaks are phased out. More, though, the 250k joint income usually means careers of 60-80 hours a week each, so even the money isn't the issue as much as the ludicrous lifestyle choices to logistically handle the children shuttling and juggling.

Undeniably, part of it is the "but what about MY career", too. Few people understand sunk costs, and spend a lot of time needing to justify their education costs. And part of it is fear that the woman will be left with no job opportunities.

But I think it's more that they don't know what stay at home mothers DO, and they don't have any idea how much fun being home with kids could be, or how to make it intellectually interesting. If they haven't had a mother who was involved in their community as chair of the theatre company or on the cmte at church or school board or den mother, and if they have no tight knit family or friends of other stay at home mothers, they've got no examples of what to do other than housework, and no idea how to make friends. In most places, time consuming careers in your 20s mean you live in a bedroom community, without ties to your neighbors, family dispersed, etc. so they have no friends out of the workplace themselves.

Someone suggested that the homemaking is less time consuming than it used to be. Yes, but the child rearing is moreso. You are no longer allowed to throw your kids outside and have them just play for hours at a time. In fact, there are few neighborhoods where the number of at-home-in-the-day kids reaches a critical mass even for spontaneous play--everyone else's kids are at daycare. And you and the rest of the adults are expected to be far far more involved in child rearing, whether you work or not. So the new stay at home mom is the playdate organizer and moderator, the hostess, the homeschooler, the chauffeur, too.

bagoh20 said...

"The house is clean, I'm looking my best, dinner is almost ready, and we're all happy to see him come through the door."

Would you consider adding a second husband?

LilyBart said...

Yes, staying at home is so much cheaper than working. The stay-at-home moms who live in my neighborbood have maids, go for regular mani/pedis, go out for lunch with their pals, and are working on serial home improvement projects. They also shop a lot.

LilyBart said...

... oh, and when we get together, they want to talk about all the TV programs they watch.

AllenS said...

This isn't the first time that I've brought up my personal finances, and it looks like it won't be the last time that nobody, and I do mean nobody, will say that the poor don't pay taxes.

Seriously, WTF?

I'll bring up my personal tax experience
every time this subject comes up.

Scott M said...

INCOME tax. It's a very specific tax. It is not FICA or SS. Perhaps I'm misunderstanding what you mean.

Nomadic100 said...

I have read that 43.4% of the population pays no income tax whatsoever and some working poor actually are paid by the government in addition to their wages.

Somehow, I don't believe that Obama's "balanced approach" which contains tax increases for the "wealthy" will increase the numbers of taxpayers. Everyone should pay some income tax as that would give everyone some incentive to know about government.

I concur with AA's recommendation for a modernized "Home Ec."

holdfast said...

I Canada in the 1980s/90s we were all, boys and girls, required to take a grade 8 course called "Life Skills" - cooking, sewing, drafting, metalwork and wood shop. At the time it was annoying, but in retrospect, it was incredibly useful. Had they only added home electrical repair, knife fighting and precision riflery, it would have been perfect.

It seems that divisions of labor do emerge in marriages, often quite stereotypical, and my wife certainly does most of the cooking and me most of the grunt labor and repair work, but but everyone should at least be able to do the basics necessary to run a household, if for no other reason than that the other spouse could fall ill or leave.

jamboree said...
This comment has been removed by the author.
Shanna said...

I wonder how much the prepare-in-case-of-divorce, it-might-happen, never-forget-that mindset led to an increase in actual divorces. If you're constantly countenancing something as a possibility for yourself and your life, how much easier does it become to choose that option when faced with unpleasantness or dissatisfaction?

This is what I always think about pre-nup’s. Is it wise to enter a marriage with a plan for getting out? I always think that works its way into your brain…

As for the two income tax trap, there may be some truth, but bear in mind that you still have two adults paying for one house and they are probably still making out economically better than single people, particular those with no kids, who have very few deductions to speak of.

AllenS said...

Scott,

I'm retired, I don't pay from my small income, FICA or SS taxes.

I do have to pay Federal income taxes. From my work related retirememt income, they deduct taxes every month.

My taxes from the state of Wisconsin, was $131, that they collected from my taxable income. I received from the state of WI, a check of $131. So, I didn't pay any income tax from WI. However, as I have said before, I'm going to put up a carport from Menars, which will cost $2153, and so far, before I've even ordered the building, I've spent $150 for a land use permit, and then $50 for a building permit.

Anyone? Catch the message?

AllenS said...

What? Nobody wants to comment?

Fuck off.

Dust Bunny Queen said...

Anyone? Catch the message?

Comment #1: don't alert the county that you are building if it isn't visible from the street and your neighbors don't care. They don't need to know everything.

Comment #2: if your gross income is a low as you say and you have the standard deductions and personal exemptions or enough deductions to do a schedule A, you should contact a tax advisor. Don't do your own taxes.

I don't know about the State withholding taxes from your pension or before tax contributions without your permission. If you can opt out, I would, and then let your tax professional figure out the deductions and taxable income.

Comment #3: Chill

caradoc said...

How does conservative interest in a traditional family factor into your guess Ann?

Anyhoo, As someone who did both the 2 income and (now) one income thing (and will eventually go back to two when the kids are old enough for it to make financial sense) I'd like to put in a few points here. First is society expects men to work, period. If you aren't working and the wife is there is an immediate assumption that there is something wrong with you and your character. Second, women are taught throughout their schooling that the only path to fulfillment is a career, and that stay at home moms are somehow inferior. While many eventually see past that, the growing demographic of single , regretful ad 40 something women shows that not all escape the trap. Third, you are right about HomeEc -- I took that (yes, even guys took that back then) and there was nothing about economics. That goes to a greater concept though -- parents in this country (and probably others though I've heard it's not) don't tell their kkids what they make or how the money works, the bills, etc. kids don't understand compound interest, credit cards and scores (al though they sure do know about white privilege and great historic homosexuals). The wife and I realized a decade ago that only one of us could have a career, the other would have to have a job (based on our fields we couldn't do both) and figured out who was likely to make more, so I got the job end of the stick. After the kids, it wasn't worth it to keep me working full time for an extra couple of hundred a month after daycare just so we could be those people the kids see at bedtime and on weekends. But not many people will make that choice, and if they're already behind on debt when the kids come they can't because they need that extra hundred or so. And if they're not good with money they never will get out of that hole.

Ralph L said...

Wisconsin must have a (relatively) low income tax rate for lower income people. Here in NC, the standard deduction is only $3000, and it's 7.75% for everyone. Because of dividend income and a part time job, I was paying much less federal that state income tax, thanks be to Bush.

The new Repub. legislature allowed the temporary 1 and 2% surcharges on higher incomes and the extra 1% sales tax (on 6.75%) to expire.

roesch-voltaire said...

Dust whosh, while out sailing this afternoon I could have used some of that wind, but my suggestion is that small businesses can form coops to help their employees with child care, About govt control that comes from supporting day care that is just your twisted thinking. I would suggest a visit to center I mentioned in Toyko to discover just how little influence the govt has other than encouraging the young to have more children. Why is it that conservatives imaginations are so stuck on limited resources for families?

Freeman Hunt said...

I would suggest a visit to center I mentioned in Toyko to discover just how little influence the govt has other than encouraging the young to have more children

And the birthrate in Japan is...

alwaysfiredup said...

"but my suggestion is that small businesses can form coops to help their employees with child care,"

No, your suggestion is that they should and possibly must. Of course they can, or at least some can. You would choose for them.

Freeman Hunt said...

Also, would people really do that? Just send their kids to their company's daycare by default? Doesn't everyone do extensive research and send their kids to the best place they can afford?

AprilApple said...

The democrat party created the crisis - so they can fix it. With higher taxes!
"Never let a crisis go to waste"

Thrope said...

I agree that two-income families (especially the ones that have to pay for child care - which by the way should be fully deductible with no b.s. cut-offs) are getting screwed by our tax system.

But there are two intangible benefits to consider.

1) If you have a two-income household, and one of you loses their job, you can always get rid of the child care and still have the income it takes to make ends meet. In uncertain economic times, that is a big consideration.

2) Say you are a two-income couple, both pursuing solid careers. Leaving a career for 5-6 years (or more if you have multiple kids) until your child is ready for full-time school can make it very hard to get back into a real career track. So if you both continue to plug away at your careers while you pay for child care, having two unbroken career paths could actually put you ahead a decade later, despite the confiscatory tax rates you pay during the childcare years.

Corky Boyd said...

"the spouse who doesn't bring in the dollars can provide great economic benefits by directly performing work that would otherwise have to be paid for, most notably child care. Since this economic benefit isn't taxed, it's a double benefit."

This is precisely what Democrats have wanted to tax. In the late 1990s Al Gore was pushing for a tax on imputed income. The first target was to be folks who didn't have a mortgage. But it would easily have applied to child care, lawn mowing an the like.

It didn't gain much traction then and I don't think it could be sold now. Not with Tea Party activists around.

carlbridges said...

Well said, Althouse. My late-30s daughter follows the plan you outline in your post. She semi-home schools her kids, cooks at home, shops thrift stores, and probably saves more than she would earn after expenses. Her well-paid husband brings in the cash, and she makes it go farther than most.

However . . . the "regime uncertainty" that Glenn Reynolds keeps talking about at the national level also plays a role in the home. The less a woman expects to remain married, the more likely she is to want a career and her own money. No one can blame her.

Frugal living and stable marriage: you often can't have one without the other.

CG said...

To Freeman Hunt's point about Japan's low birthrate despite governments encouragement of families having children...

The Nordic countries / France also use government policy to encourage childbearing and they too have low birth rates.

I think part of the problem with "encouraging" women to have more children and work through high taxes/subsidized childcare is that most mothers of young children would prefer working part-time (if at all) as opposed to the standard go-into-the-office for 40 hours a week track.

Parents, like most other human beings, enjoy the freedom to choose.

CG said...

To the point of what's the point of a woman working --

Keeping her skills intact in case her husband looses his job. Which has happened in a lot of families I know.

CG said...

And the tax trap --

Can be avoided in some households. If a woman has an at home business she can establish it in her husbands name. A nanny can be paid with pre-tax dollars (yes, the nanny will need to receive unemployment/FICA, but that is less than state + federal taxes).

The woman's income may push the husband's income above the cutoff for FICA, and they will effectively have a 15% discount on that income.

Quilly_Mammoth said...

I almost spewed coffee when I saw this as this is _exactly_ the conversation my wife and I had yesterday. We are thinking of shutting down my supply company and letting me home school our son.

At this point I'm basically working my ass off to keep two people employed.

If the Bush tax cuts expire and the economy continues to falter we will have to take that option.

X said...

The bottom line is that the head of the Consumer Financial Protection Bureau lied to consumers of her book. By her own lights she should be barred from writing, barred from working in government, and pay a hefty fine.

JPF said...

There is a place you can go to learn how to live on one income, that teaches both men and women how to accomplish this. It's call the Dave Ramsey Show. I wish I had discovered Dave about 10-15 years ago!!

Milwaukee said...

Scott M:
THAT'S what I would like to do. Take care of the house, the kids, and crank out a couple of novels. If you beat the little rugrats enough, they don't bother you much while you're trying to write.

I haven't written much more than bad haikus, but from what authors say, it is very hard work, and near the bottom in terms of return on intellectual effort. Stewart Alsop, who once was a columnist for Newsweek had a writer for a father. His father posted a sign on his study door giving the children guidelines for when they could disturb him. Something to the effect of 'If the bleeding isn't arterial, and the bone isn't sticking through the skin, why are you bothering me?'

Milwaukee said...

Allen S: After my divorce, I left my teacher job for graduate school. I was paying my ex-wife more in maintenance than I was making as a graduate teaching assistant. In Milwaukee, my rent included heat. The refund from the 2010 taxes from Wisconsin was about 3 times what I paid in taxes. Not only are the poor not paying taxes, they are collecting money, and not just welfare.

Years ago the Milwaukee paper ran an article about how it would take two careers from the following: teacher, nurse, firefighter or police officer to support a middle class family in the Milwaukee area.

When my ex-wife did work, her pay covered child care, and her work related expenses. We were more likely to treat ourselves to dinner out and nicer vacations than when she either wasn't working or working half-time. Life was much better when she could work half-time. However, she preferred working to being with the children.

Nate Whilk said...

Althouse wrote, I think young people should be taught a course called "Home Economics," which teaches a sophisticated analysis of the economics of living together and sharing money and work.

An EXCELLENT idea. If I were a math teacher, I'd be giving problems like this (inserting relevant numbers as necessary): Jesse sees that his daughter, Latrice, is interested in medicine. For various reasons their family doesn't qualify for any aid except student loans. How much must he save a month to pay for her college and medical school, and how many hours of work does that represent?

John is a HS senior and has a part-time job at McDonalds. After deducting taxes, how many hours must he work to buy the car he wants and then pay for gas and insurance (assuming he can be added to his family's car insurance)?

But perhaps the government, through its schools, does not want to reveal the amazing secrets of legal tax avoidance. How much better to indoctrinate kids to seek the highest incomes they possibly can achieve!

I think that may be overstating it a tiny bit, although I admit it's completely plausible. Schools just never taught such things. People with more than the minimum bit of sense picked them up as necessary (possibly with a CPA's help). That doesn't seem to be the case any more.

wv: inglit. "English Literature" in Orwell's world, which now consists only of the writings of Big Brother. Or current English Lit programs at most major universities.

walter said...

Harry mentioned "Let's not forget the related benefits that flow from a second job, such as health insurance and retirement savings."

And there is a larger issue here of compensation as well as taxation based upon family structures not so predominantly found these days. Does it make sense for a couple to be able to choose which employer's spousal health care benefit to go with? Does spousal/family coverage of an employer's health care offerings not lead to more compensation for married/parental employees vs single for the same work? Would gay marriage be as much an issue if healthcare wasn't in the mix? Now we see "domestic partners" of either orientation gaining benefits, at least in the public sector such as Madison and Milwaukee. Me thinks the spousal benefit structure being twisted to meet today's permutations was intended as a societal nod to single earners raising children.

ladyliberty1885 said...

If you look at various items and markets today, we see they are built to favor 2 income families - cars and houses being the most obvious ones.
The 80's was all about telling Women they can 'have it all'. Well, have what exactly? Two jobs? One at the office and one at home-- and doing neither one very well or at 100%?
The indignation I've received back in posing that question to women friends around me was interesting. Many of them work outside the home and look at what I do as a Mom and Homemaker as setting women back in status. I couldn't disagree more. I've lived both sides of the coin and as a Stay At Home Mom (SAHM), I see the lie of 'having it all' crystal clear.
I am reminded of the proverb, "You cannot serve two masters and be loyal to both".
Or from Matthew 6:24 - "No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money."

d1e749b4-8e0f-11e0-9ca3-000bcdca4d7a said...

"like subsidizing the traditional family with a stay-at-home parent."

Really Ann? A lack of tax is NOT a subsidy.

Not to mention they are already paying gas taxes while driving kids around, sales tax on groceries, paying higher insurance premiums...

Akai_Tsuki said...

I agree that often one is left with little of the net income from the second salary after paying taxes and other expenses, such as childcare.
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