Kent Pitman

Kent Pitman
Location
New England, USA
Title
Philosopher, Technologist, Writer
Bio
I've been using the net in various roles—technical, social, and political—for the last 30 years. I'm disappointed that most forums don't pay for good writing and I'm ever in search of forums that do. (I've not seen any Tippem money, that's for sure.) And I worry some that our posting here for free could one day put paid writers in Closed Salon out of work. See my personal home page for more about me.

MY RECENT POSTS

DECEMBER 21, 2011 12:40PM

Pondering the Meaning of $40

Rate: 35 Flag

Republican Senator Mitch McConnell famously said, “the single most important thing we want to achieve is for President Obama to be a one-term president.” And Republicans in both houses of Congress have seemed dedicated to this quest, opposing virtually anything Obama tries to do to help the economy, even many things that were proposed originally by Republicans.

Recently, the Republicans have even seemed anxious to violate the Norquist pledge in order to oppose Obama by voting against extending the payroll tax cut, a move that would raise taxes on ordinary Americans in a very noticeable way, by an estimated $40 out of every two-week paycheck for someone making $50,000, or by $1000 year if you prefer to think of it on an annual basis.

In an attempt to finally play some offense against a Republican-controlled Congress—or perhaps more precisely a Republican-impaired Congress—the White House has asked, “What does $40 mean to you?”

You can go to their site to answer for yourself. My answer is probably longer than they wanted, but that’s how it goes. I thought I’d share it with you:

I make more than $50K, but that means I give up less than someone who is making $50K. It's true that it's more money out of my paycheck, but that "more money" probably has less impact on me than the $40 has on someone making less.

To people I know who are making $50K and trying to support a family, that $20/week or $83/month, could be the make or break for heating oil or electricity or groceries or clothing. I know because we get calls from family that run short of amounts like these and need occasional help.

Raise my taxes if you need to, and CERTAINLY raise the taxes of people making more than me. But for people making less this is REAL money.

For me the missing money would probably mean a lost vacation -- but perhaps a vacation someone making $50K might never have taken. So I'd notice the difference for sure, but I can hardly call the absence of a vacation some sort of pain. I wouldn't be put at risk of starvation or of losing my home in the way people making less money than I would be.

For people making more than me, I bet the lost money is no more than numbers on a page and changes nothing in how they behave.

The less one makes, the more precious these small amounts of money are. The more one makes, the more money doesn't matter. I bet most people making a huge amount of money don't even care about small amounts. That's why people of means write $50K and not $50,000, right? Who can be bothered with all those pesky zeros? And yet these amounts of money DO matter to people who are just barely getting by.

Would I feel it if my taxes went up? Sure. I'd have to adjust. But I'd cope. That's why I KNOW people making MORE THAN ME could cope with paying a little more. If I can do it, they can do it. But I would NOT say that about the people making less.

For the poor, every dollar goes to mere survival. And every single missed dollar is a threat to that survival. For the middle class, some dollars go to survival and some to comfort, so missed dollars might come out of comfort, though they may not have many comforts to draw from. It might mean the difference between Christmas and no Christmas, since many people don't have $1000 to spend on Christmas; they may save all year for gifts much more meager. It could make a huge difference in quality of life. Yet for the rich, survival and comfort are assured, and the missed dollars only affect WHICH comforts they'll see, or HOW MANY and HOW SOON.

See my Open Salon blog article "Enough" for a pictorial representation of this. It wasn't written in response to this question, but it's on a closely related topic and many have said they found the graphics I made to be visually helpful.


http://open.salon.com/blog/kent_pitman/2011/08/10/enough

ACTION ITEMS

If you got value from this post, please "rate" it.

Please visit the White House page
“What does $40 mean to you?”

RELATED POSTS BY KENT PITMAN

Credit Cards: A Tax on “Being Poor” (January, 2009)
Tax Policy and the Dewey Decimal System (February, 2009)
Enough (August, 2011)

Click here to see Kent’s offsite index of posts by category.

Your tags:

TIP:

Enter the amount, and click "Tip" to submit!
Recipient's email address:
Personal message (optional):

Your email address:

Comments

Type your comment below:
Kent. Fantastic. And agreed with every word. Rated. And on my way to answer the question.
Thanks for writing this, and letting us know about this question. I find myself nodding in approval for a White House who at least is actually asking this question...
...and just to say out loud...
$40 to me would mean in 10 months of saving it, I could have my tooth fixed.
Thank you for this, Kent. I will be visiting the site.
Well reasoned analysis. I also agree with every word.
rated with love
Thank you, Kent. I so rarely pop in anymore, when I do, it's for something monumentally important. Like this.

I wrote far too much on the White House page as well, and it boils down to, "I won't notice it. Take it from me. Not from those people for whom it means the difference between food an insulin."
madison, that saint of the american voter, demanded that not one dollar be taken from him, to succour the poor.

wealthy americans support the rabid wing of the congress to re-establish this principle. if you can't take one dollar, you can't take a lot of dollars. there is an important legal principle here.

if you don't agree with with the 'not one dollar' principle, then you are on the road to socialism. nothing wrong with that, but it needs a new constitution.
Very rated. And I will go answer the question. For my family, it's our dental insurance or half of our monthly food bank contribution. Or, a doctor's appointment co-pay. Or the co-pay for my monthly BP med. We, like you, will be OK without the $40 - but for a lot of people, things like co-pays, premiums, donations and meds (which are only sort-of optional) can't be paid for by cutting out a dinner at a restaurant for their family.
Being disabled I live on $800 month. $4o out of my check would mean I would have $60 more to play with because if that $40 were to disappear I would not be able to purchase the medication I need that isn't covered by my prescription plan. That medication costs me $100. When you live on $800 month you learn real quick that there are no extras or luxuries. So in conclusion, I have to say that, for me, $40 lost would be absolutely devastating. Rated with thanks
Rated. Thank you for raising the issue and the question. Seems like $40 means more and more each day to more and more people.
I don't know which constitution you're reading, al, but the one I've got access to specifically gives Congress the right--and the responsibility--to levy taxes.

Also, it doesn't set up Capitalism as The American Economic Model.

I'm proud to be a socialist. I love society.

And I wish the anti-socialists would drop the high-minded pretense and call themselves just what they are...antisocial.
Thanks for this, Kent!

I am definitely rating your post but I don't have much to contribute to the discussion as defined inasmuch as my financial circumstances aren't relevant to what's being discussed. [I, personally, am retired and not affected by payroll taxes and my annual income is so low I do not file federal taxes. Wudja believe?! ;-)]

R
Kent this was brilliant. YOU are smart enough to judge me. Please do sometime when you get the chance. I put up a bit on this very subject, only from a radical perspective that dares suggest we back our currency on something rather than nothing.

As always I am deeply appreciative of your writing, no matter where and when I can find it, provided opportunity.

Thanks again, Kent.
Thank you for this post. As a stay-at-home mom and wife of a middle school teacher, $40 means a great deal to me.
For me, it is paying off medical bills from two years ago, still. It is a tank of gas, which I need about 4 or 5 times a month, regardless of whether I am busy enough to make money. My income very variable, and I am making less than half of what i was making all year long, right now. I am saving up bills to pay them off when I get $40. I don't have extra, I would love to save it, as I don't even get retirement.
For the Republicans it seems that the issue is not really taxes, but who pays the taxes. If moderate to low income people pay more in taxes, that's fine. If high income people pay more in taxes, that's terrible, and if the wealthiest one percent pay more in taxes, then it's the end of civilization as we know it.
WONDERFUL response. Even if they don't read it all when they see the length, they'll know you have plenty to say.

With the climate change, it's been so balmy here in the normally frigid northeast that my heat bill this month was only $51.00. December is usually closer to $200.00, so even with the $40.00 loss, those of us who have furnaces are making out, eh?! That was sarcasm, but would not be at all surprised to hear one of the dopey GOP candidates toss off that as reason why people in the cold states won't miss their $40.00.
$40....

$40 in itself would mean... gas, or underwear, or coffee for a month.

$40 over a couple months time would mean... an outfit or two, dental cleaning, pizza party for my students...

$40 over a year? Dang... What could I do with $480... brakes on the car, new toilet and plumbing issues, gutters, car detailing plus whatever... a plane ticket to see family..

I honestly think if ANYONE in congress cared, they'd opt to take a lower salary, they'd stop the private cars, the apartments in D.C., the private jets, the meals out on the U.S. dime, the free healthcare and lifetime membership to "you have a pension but the public does not" club... but hey, just thinking aloud.
In a qualified defense of the Republicans, they didn't like the temporary nature of the tax cut as to two months, and, they wanted a longer term deal out of the process, which a significant number of economists would say is for the best when you have as high a Debt to GDP ratio as we do, if, I think most economists would say that if you can't do that longer-term deal, that at some point the parties needed to just finish out this year, since that tax cut is a lot of fiscal drag, ceteris paribus as they say, although it's also robbing Peter to pay Paul on Social Security's insolvency issue
I really wish that the parties on both sides had stayed with the President's own commission, as it was bipartisan, Simpson-Bowles, and just tweaked that a little bit, but, politics wouldn't let that happen as to what people wanted not being mutually consistent enough, if maybe Simpson-Bowles were... not inspiring enough leaders on it either. I wish Ross Perot would re-engage more now, as it seems to me he has voters who would remember him, and, the Debt to GDP issue is now pretty serious, and without saying it, he can say I told you so almost 20 years ago to date, and, we need more revenue and some less spending, as that's not really rocket science. Federalist 10 is starting to look prescient as to faction doing a lot of harm.
Well said Kent. It is a bite for many people and a call for thoughtful consideration amongst all of us. thank you Kent.
@ Don Rich:

Thank you for your mention of "the Social Security insolvency issue". As the only commenter so far whose dollars and cents ("meaning of $40) personal circumstances approximates mine in the overall arithmetic or personal meanings and choices of $40, I didn't want to ?muddy the waters? by mentioning this aspect of the current congressional/presidential debates and struggles. But if you or Kent or anyone else wants to get into this, I sure would like to hear some more opinions about that aspect of this particular -- if I must? (*) political pre-election year gambit. Like: how does/do any of you assess the impact not just in immediate shortterm individual fiscal abilities (securities?) of this current tax cut extension, vis-a-vis the effects of those cuts on those of us whose financial planning relied as heavily (if, some of you might argue, naively?) on "trust in the government" (i.e. "investment" in Social Security rather than purchase of private sector money investment) when we thought we had the choice? Much less the effects on those only now reaching or approaching the age eligibility for Social Security?

Apologies for longwindedness; thanks again Everyone! ;-)
It simply makes more sense for wealthier people to pay more in taxes. It is more abstract than assigning numbers or dollar values; the more money a person makes, the higher his standard of living (in general). The higher his living standard the more resources his is using and consuming and the more he is using and consuming, the greater the impact he is having on everything - the community, the environment, the planet. He may pay more for many of these things, for example for fossil fuel to heat his larger home, but that's only part of it. I would bet that his impact is exponentially greater on the world around him because he makes greater demands on it due to his lifestyle. I'm sure it could be calculated somehow as a ripple effect and I'm also sure their is some economic or maybe sociological term for what I'm trying and really not succeeding in saying. A person who makes more money should be taxed significantly more, for everything.
P.S. Didn't mean to be falling for a "soundbite" rile-people-up connexion between decreased government income from tax cuts and threat to Social Security, o.k.? ;-)
Apologies for triple post! (and HI MARGARET!! You were posting while I was still trying to correct typos in my comment[s]). What got omitted in my first post was my intent to refer to the comment of "I am Stretch", which I particularly much appreciated! I will now LOG OFF!, I promise! [For now, any way ........?! ;-)]
Well said kent. When you're just scraping by, the lot in life for most
Great post. Should be EP and cover.
Hi, folks. I've been busy with work so not responding individually like I usually try to do. I hope no one minds. I'm reading every response, though, and really appreciate the positive feedback. I'm glad it looks like many are going to go fill out the survey. Even if the White House doesn't read every response, at least I bet they'll be able to tell that people are affirming their attempt to use this new approach to conversation with the public and with the Republican opposition.

I'll reply here to just the few comments that really demand it:

al, I agree with Verbal's response that the Constitution of the US gives the power to levy taxes. As for whether the US should be socialist, I don't think that. Nor do I think it should be pure capitalist. I think it should leave to the market what the market can reasonably and fairly be expected to do and should operate in the interest of the citizens through government on what the market cannot be trusted to do. Health care, unemployment insurance, and even basic education, although not enumerated in the Constitution, seem to me clearly to be things that will fail on grounds of fairness and accessibility if left to the market, and yet seem essential to the “General Welfare” that the government is charged within promoting, so they have to be done by the government—whether done wholesale or simply regulated enough that they can be done privately is a detail. But the result is a hybrid of socialism and capitalism. That a good government is not a dogmatic government should not surprise anyone. Those who criticize a system for not being pure are not impressing me. It's no one's goal to live under a pure system of government if the outcome isn't good; and if the outcome is good, I don't think people care what the system is.

Doug, thanks for the kind words about my writing. You can find more of it here (blog summary page) and here (miscellaneous publications page).
Greenheron, you're right some of their attitudes don't pass the laugh test. They probably think that the key problem we're worried about is that if taxes go up, we'll have to sell some of our stocks at a time when the market is weak just to get the money needed to cover.

Don, originally they didn't want it at all. If they had, it would have been done. The Democrats weren't fighting it, after all. They're looking for a way to oppose everything Obama does. The idea to say it was too short an extension can only have come after debate reached an impasse on a rational length extension. As to the issue of Federalist 10, I'm not 100% sure I see the application in this case, as this particular battle seems to be a class-based battle, not a battle among special interests. I guess there is a sense in which the 1% are a special interest, but I don't perceive that to be what Publius was addressing. Then again, I'm not an expert on all things Federalist. And although I'm sure they thought about exports in general, I think the notion of a multinational corporation so efficient that production of individual parts could be distributed world-wide in a way that threatened jobs at home was outside their scope. A lot of their discussions are heavily geographical in a way that seems almost pleasantly quaint and is hard to map into the modern market. They were smart guys and would surely have had something to say about the modern market, but the physics of these eventualities just probably made such matters seem too esoteric to them. Even when Perot raised the matter of the giant sucking sound, that was outside the comprehension of many who it soon came to affect.

Marte, if you're asking what I think of short term measures, I think they are reasonable and appropriate. If we don't get the economy moving again, our potential for long term debt problems will only magnify. As for taking care of our sick and elderly, we simply must commit to doing that. I don't think it's foolish to have a system that promises that. The reason prices keep rising is not that it's impossibly expensive to do these things; prices rise simply because they can. That is, there is no price elasticity of demand on these kinds of things. The market can charge as much as it wants, and the proper antidote to that is government oversight, not because I'm big on government oversight as a cure to all problems but simply because there's no way in the world that private business is going to do better—it has no economic incentive to do better. The sick and the elderly are not good customers in the sense that they cannot afford to pay their way, but neither should they have to. And telling them they must save up individually is bad because the obvious math is that they will pay way more than needed if they have to pay for themselves. It's enough benefit for someone else who stayed well that they stayed well; telling them they get to spend their health savings on vacations just rewards those lucky enough to be healthy unfairly. Sure, sometimes that staying healthy is causal, but often it is not. They just got lucky. And unless we want to say we're a society that cares more about people with good genes than bad, we need the lucky to help the unlucky and not simply tell them to be smug and say “too bad you brought that problem on yourself” (or that you were born to bad parents). That's no recipe for people having equal opportunity.

Margaret, interesting argument about the ripple effect. I suspect you're right.

I think I'm up-to-date now. Thanks to those who have commented so far, and I'll keep reading if more comments come in.
A tank of gas. Which would mean I couldn't go to work for a week. Which means I would miss a weeks pay. Which would mean a lot more than $40.
I am lucky enough to not miss $40 a week so the above wouldn't happen to me. But then, I am in a very small minority. For millions who dont live in the "a billion here and a billion there and pretty soon you're talking about real money" crowd $40 is serious.
[R]
Well, they finally caved. Although it looks like Keystone was part of the deal.
Tim, I definitely hear you on the gas thing.

Lefty, maybe I've missed something but the only part of the deal was forcing a near-term decision on Keystone. Last I heard was that it was a realistic possibility that this rush will cause it to be denied; if you find out otherwise, let me know.
I keep learning to live with less. Don't know how long until it ceases to work any longer. Thanks for an intelligent take on the problem, anyway.
Diana, thanks for visiting and commenting. I'm sorry but unsurprised to hear it's that kind of struggle.