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Affluent Christian Investor | December 3, 2020

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What Does It Mean To Be American Poor?

Recent research has shown American poor are nothing at all like the poor throughout the history of the world, as well as nothing like the poor in the United States even only 50 years ago. In fact, a report from a joint research project by the left-leaning Brookings Institution and right-leaning American Enterprise Institute discloses that “poor children today [in the U.S.] are better off in several ways than they were a few decades ago. They have better access to healthcare; fewer are born to teen mothers, their parents have more education; they are exposed to fewer environmental toxins and violence; and fewer live in fosters care,” reports AEI and Brookings, “We should celebrate these advances.”[1]

While improvements to the conditions of the poor are significant, the joint report also warns, as the above research supports, that “mothers and children in single-mother families are five times as likely to be poor as those in two-parent families. Children in single-mother families also experience an array of developmental problems at much higher rates than children in married-couple families.”[2]

Socialists have always targeted the destruction of families since it is the cornerstone of economic prosperity and the centerpiece of Natural Law. James Robison and Jay Richards write:

Did you know that one of main goals of the founders of modern socialism was to destroy the family?  As soon as they took power in a violent revolution in 1917, the Bolsheviks began liberalizing Russian divorce laws.  When the socialists took power in Spain in 2005, they did the same thing.  Socialists want an all-powerful state that molds every individual into a new human being, the “socialist man.”  To do that, they need to get everyone as early as possible, while they are still impressionable.  The socialist would much prefer a mass of isolated individuals all dependent on the state from the beginning, rather than having to work through a complicated thicket of family ties.  Socialist states don’t like other sources of authority that limit their power.

Frederick Engels, Karl Marx’s coauthor,…argued that the socialist vision required the destruction of “private property, religion and this present form of marriage.”[3]

In 2007 to 2009, the top quintile (top 20 percent) of Americans before tax income fell the most; 12 percent for top 20 percent (a 36 percent drop for the top 1 percent), and an average of 5 percent or less for the bottom four quintiles (bottom 80 percent).[4] While the top 20 percent drop in average federal tax rate, 24.7 percent in 2007 to 23.2 percent in 2009, their share of the federal tax liability remained nearly the same, from 67.8 percent in 2007 to 67.9 percent in 2009, while only receiving 50.8 percent of the before-tax income. [5]

The top 1 percent paying 22.3 percent of the tax liability while receiving only 13.4 percent of income.[6] While in 2009 the bottom 20 percent paid only 1.0 percent of the federal income tax liability and bottom 20 percent receive 5.1 percent of income while only paying 0.3 percent of federal taxes – with an average rate of -9.3 percent (that is, the bottom quintile receive redistributive income via the government). Between 2007 and 2009 the lowest quintile’s tax rate fell by 3 percent.[7]

The higher income households are impacted more heavily by a decrease in capital gains income. Between 2007 and 2009 capital gains income dropped by 75 percent,[8] while the top 20 percent of income earners paid nearly 80 percent of the corporate income tax.[9]

The devil is in the details, but, of course, so is understanding.

[1] American Enterprise Institute and Brookings Institute, 2015, “Opportunity, Responsibility, and Security:  A Consensus Plan for Reducing Poverty and Restoring the American Dream,” (American Enterprise Institute: Washington, D.C. and Brookings Institution: Washington, D.C.), p. 8.

[2] American Enterprise Institute and Brookings Institute, 2015, “Opportunity, Responsibility, and Security:  A Consensus Plan for Reducing Poverty and Restoring the American Dream,” (American Enterprise Institute: Washington, D.C. and Brookings Institution: Washington, D.C.), p. 14.

[3] James Robison and Jay W. Richards, 2012, Indivisible: Restoring Faith, Family, and Freedom Before It’s too Late, (New York, NY: Faith Words, Hachette Book Group), p. 128.

[4] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” (Washington DC: Congress of the United States), p. Summary.

[5] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” (Washington DC: Congress of the United States), p. II and p. 3.  See Summary Table 1, Distribution of Federal Taxes and Household Income, by Income Group, 2007 and 2009.

[6] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” (Washington DC: Congress of the United States), p. 3.

[7] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” (Washington DC: Congress of the United States), p. 3.

[8] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2011,” (Washington DC: Congress of the United States), p. 1.

[9] Congressional Budget Office, July 2012, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” (Washington DC: Congress of the United States), p. 9.

 

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