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Tuesday, February 19, 2013

Food Stamps, Welfare Discourage Work

Economists and many policymakers generally agree that our tax and transfer systems should promote opportunity, work, saving, and education rather than consumption.
The problem is these programs often penalize people for earning that extra dollar of income.

Rather than promoting work and savings, these implicit taxes punish such otherwise positive behavior.

These penalties occur in TANF (formerly welfare), SNAP (formerly Food Stamps), Medicaid, the new health exchange subsidy, Pell grants, student loans, and unemployment compensation.

The tax code also is loaded with disincentives to work, save, and study. They include PEP and Pease (reductions in tax allowances for personal exemptions and itemized deductions), child tax credits, and the earned income tax credit.

These implicit taxes combine with explicit taxes to create incentives for many households that are often inefficient and inequitable, to say nothing of strange and anomalous.

At some income levels, families face prohibitively high penalties for moving off assistance. For instance, a single worker with children could face a steep cut in child care assistance simply for accepting a higher paying job or getting a raise.

8 comments:

Anonymous said...

I admittedly am on welfare due to my unemployment. Between the food stamps, medical assistance, dental assistance, and other programs, I estimate that I am receiving $20k in benefits which is nowhere near enough to support my wife and 4 children.

I am not proud of my situation and have been diligently seeking employment for several months now to no avail. However, others in my area are taking advantage of these benefits and either not seeking employment or looking for jobs that pay under the table.

Many employees who work in OC take advantage of the system by purposely and lazily sponging from the state. Many people I have talked to state that they take it easy and/or do a lot of travelling during the off-season because they are entitled to unemployment and many of them get jobs that pay under the table. They live purpose-less lives and have no ambition. Most of them waste much of their time smoking dope and getting drunk. They are the unproductive and useless menaces of our society that are multiplying in record numbers.

It appears that the number of employers in the area that pay under the table are increasing at a rapid pace. This way the company saves MUCHO money by not having to pay as much in taxes and not have to provide benefits to their under-the-table employees. I guess you can't blame some of them since they would be out of business if they did not.

Anonymous said...

2:22
At least you're not happy with your situation and trying to better yourself.
That does not appear to be the case with waaaay too many recipients.

Anonymous said...

This so true.....15 years ago when I was a single working mother I actually had to turn down a raise because I would loose my daycare help but the raise was not enough to pay for the difference in cost. I needed the system for about 2 years then got on my own 2 feet and off ALL assistance more then 13 years ago. Now I am sickened that my hard working money is wasted more times then not.

Anonymous said...

2:22 here...thanks 3:15.

I have tried for several months now and if something doesn't materialize soon, I may have to move to the Baltimore suburbs where jobs are more plentiful. Most of the jobs that require intelligence and education around here pay $10-$12/hour compared to the $25/hour I received 10+ yrs ago when I live on the Western Shore. I'd be willing to take the $10-$12/hr jobs rather than being jobless and unproductive, but I would eventually end up car-less, home-less, and food-less. Need to cling onto hope though because if you have a hopeless attitude, you're DOOMED! Have been thinking outside the box about creative ideas to make ends meet.

I can relate to 3:37. I assume she is in the same financial situation she is now, then she was in 13 yrs ago when she receiving help from the State of MD. I would be in the same situation working for $10/hr as I would lose much of my benefits. It sucks and when Obamacare starts kicking in,it's going to suck even more for EVERYONE as companies cut back hours and slash their pay rates.

Anonymous said...

I know unemployed people with serious health issues who purposely do not seek work because they would lose their free medical assistance and $1 prescriptions.
It's a Catch-22 for them and many other unemployed Marylanders with health problems...either get a job and die or don't get a job and die a slow death living a meaningless & unproductive life.

Anonymous said...

Duh how many dumb boob politicans did it take to figure that one out ...i knew that 40years ago

Anonymous said...

Duh how many dumb boob politicans did it take to figure that one out ...i knew that 40years ago

February 19, 2013 at 5:54 PM

Which district did you serve?

Anonymous said...

Go get a job and take care of your family.have some pride get of the checks.