$10/hour x 40 × 52 = $20,800/12 = $1733.33/mo Income
Immutable Expenses:10% Tax = $173.33Rent – 1 br apt in my area: $670Utilities & phone: $145Bus Pass: $120 (it’s cheaper than gas, insurance & parking, never mind the price of the car, and you gotta get to work to make that $10/hr)
Unavoidable expenses: $1,108.33/mo
Variable expenses for 1 personGroceries: $300 more or lessMedical, Dental, Optical: Insurance — $150ish if you have a generous employer Co-pay — $25 – $45 depending on provider Deductible — (one person) $500/12 = 41.66 Glasses — $240/12 = $20 Out of pocket @ 20% — Best case scenario: No non-routine care, so $0. Perfect health also means no Rx expense, unless you need birthcontrol pills. Estimated Medical: $250.00 — of course you can cut back here, if you don’t go for annual check-ups, eye-exams or semi-annual dental cleanings, and remain celibate. God forbid you should actually get sick or hurt, because 20% of a $100,000 hospital stay (4 days) is going to cost you another $167/mo.
Best Case Variable Expenses: $550 which leaves a “disposable” income of: $75.00.
You might want to get a haircut (a mere $15 if you don’t tip the beautician), pantyhose (5 pair for the work week @ $6/pair for the cheap kind and hope they don’t run so you can wear them for the whole month = $30), Now you have $30 left that you can spend on a new blouse or maybe a bra. If you save up for 3 months, you can buy a decent pair of shoes.
Oh rats, I totally forgot about retirement. We should have saved $173.33/month in our 401K. Let’s see. We can cut back on groceries, make it $200/mo. That gives us an extra $100. If we forego haircuts, we will now have $145 to put away. But we’re still short. Can we cut the groceries to less than $50/week? (Remember this has to include toiletries and cleaning supplies). Let’s say we eat a lot of noodles. Back the groceries down to $175/mo. We can cut back on the pantyhose ration, and wash one of our two pairs of hose out every night so they’re always in rotation. Better cross your fingers, though. ‘Cause they are going to have one heck of a time surviving 10 wearings each. They are definitely going to fade. They’ll probably snag in places, but you’ll still be able to make do if they don’t actually run. And Tada! We can put away the recommended amount for retirement and maybe indulge in a fancy coffee once or twice.
Well, the company will only match 7%, so lets only save $122/month. Decisions, decisions. We can continue to eat ramen and have more money for stockings, or we can continue to rinse out the stockings and have more lunch.
Now, imagine that the husband was a veteran of a hot war, and when he came back, he was so screwed up with PTSD that you were in fear for your childrens lives as well as your own. So you packed them up and ran. You don’t get the benefit of his disability check (if he gets one at all), and that $10/hour job has to feed four. or maybe it was only one kid. But what’s he going to wear when he grows out of this set of clothes? What about school supplies? Lunch money?
If we took the time to write a budget for someone who takes home $4000/month we would find that even though she pays Uncle Sam $400/month — $227 more than Ms. $10/hr, she can still afford to use her health plan, take her medications and contribute to her retirement.
Uncle Sam collects from the pair of them, $573.33
Now, lets ask Ms. $10/hr to pay only 5% She gets and extra $86/month. She can now afford to feed her kid.
But, Uncle Sam collects only $486. He can’t afford to maintain the interstates with that.
So, let’s increase Ms. $4,000/ month’s taxes to 12.5%. Her taxes now rise from $400 to $500/ mo. She has to give up her Weekday gourmet coffee habit. ($100/20 = $5) and Uncle Sam gets $586 to fix the highways.
So to those of you who think a flat tax would work, unless you’re inviting the peasants to revolt, I would strongly recommend against it.
Superfrog about 12 years ago
Getting married for tax reasons is like buying a 747 to get free peanuts.
Proginoskes about 12 years ago
“Marriage Penalty”? Pffft! If you make more money, you should pay more taxes. Period.
finkd about 12 years ago
From a recent movie ad I saw on television :
The three rings of relationships – the engagement ring, the wedding ring, and the suffering.
LingeeWhiz about 12 years ago
If you will create a loophole whereby I never have to sleep with you and I get to spend as much money as I want.
cbrsarah about 12 years ago
If she quits her job, then she’s a dependent, therefore deductible.
Proginoskes about 12 years ago
@ Tigger: The lottery is a tax on people who can’t do math.
kathrynismerry about 12 years ago
Howsabout a little math?
$10/hour x 40 × 52 = $20,800/12 = $1733.33/mo Income
Immutable Expenses:10% Tax = $173.33Rent – 1 br apt in my area: $670Utilities & phone: $145Bus Pass: $120 (it’s cheaper than gas, insurance & parking, never mind the price of the car, and you gotta get to work to make that $10/hr)
Unavoidable expenses: $1,108.33/mo
Variable expenses for 1 personGroceries: $300 more or lessMedical, Dental, Optical: Insurance — $150ish if you have a generous employer Co-pay — $25 – $45 depending on provider Deductible — (one person) $500/12 = 41.66 Glasses — $240/12 = $20 Out of pocket @ 20% — Best case scenario: No non-routine care, so $0. Perfect health also means no Rx expense, unless you need birthcontrol pills. Estimated Medical: $250.00 — of course you can cut back here, if you don’t go for annual check-ups, eye-exams or semi-annual dental cleanings, and remain celibate. God forbid you should actually get sick or hurt, because 20% of a $100,000 hospital stay (4 days) is going to cost you another $167/mo.
Best Case Variable Expenses: $550 which leaves a “disposable” income of: $75.00.
You might want to get a haircut (a mere $15 if you don’t tip the beautician), pantyhose (5 pair for the work week @ $6/pair for the cheap kind and hope they don’t run so you can wear them for the whole month = $30), Now you have $30 left that you can spend on a new blouse or maybe a bra. If you save up for 3 months, you can buy a decent pair of shoes.
Oh rats, I totally forgot about retirement. We should have saved $173.33/month in our 401K. Let’s see. We can cut back on groceries, make it $200/mo. That gives us an extra $100. If we forego haircuts, we will now have $145 to put away. But we’re still short. Can we cut the groceries to less than $50/week? (Remember this has to include toiletries and cleaning supplies). Let’s say we eat a lot of noodles. Back the groceries down to $175/mo. We can cut back on the pantyhose ration, and wash one of our two pairs of hose out every night so they’re always in rotation. Better cross your fingers, though. ‘Cause they are going to have one heck of a time surviving 10 wearings each. They are definitely going to fade. They’ll probably snag in places, but you’ll still be able to make do if they don’t actually run. And Tada! We can put away the recommended amount for retirement and maybe indulge in a fancy coffee once or twice.
Well, the company will only match 7%, so lets only save $122/month. Decisions, decisions. We can continue to eat ramen and have more money for stockings, or we can continue to rinse out the stockings and have more lunch.
Now, imagine that the husband was a veteran of a hot war, and when he came back, he was so screwed up with PTSD that you were in fear for your childrens lives as well as your own. So you packed them up and ran. You don’t get the benefit of his disability check (if he gets one at all), and that $10/hour job has to feed four. or maybe it was only one kid. But what’s he going to wear when he grows out of this set of clothes? What about school supplies? Lunch money?
If we took the time to write a budget for someone who takes home $4000/month we would find that even though she pays Uncle Sam $400/month — $227 more than Ms. $10/hr, she can still afford to use her health plan, take her medications and contribute to her retirement.
Uncle Sam collects from the pair of them, $573.33
Now, lets ask Ms. $10/hr to pay only 5% She gets and extra $86/month. She can now afford to feed her kid.
But, Uncle Sam collects only $486. He can’t afford to maintain the interstates with that.
So, let’s increase Ms. $4,000/ month’s taxes to 12.5%. Her taxes now rise from $400 to $500/ mo. She has to give up her Weekday gourmet coffee habit. ($100/20 = $5) and Uncle Sam gets $586 to fix the highways.
So to those of you who think a flat tax would work, unless you’re inviting the peasants to revolt, I would strongly recommend against it.