The Shotgun Blog
Tuesday, December 18, 2007
The Taxman and the two-income family
Down here on the south side of the 49th, social conservative is a much larger political force. For that reason, I'm not all that surprised that social issues aren't discussed much here, but I am curious as to the reaction up there to a hypothesis I have long held about the great danger we face here in the 21st century: the atomization of the family.
I'm sure most of you have seen and heard the same back and forth we have about it: the right focuses on emphasizing moral values so society can, in effect, fill in for parents unable or unwilling to impart such values on their children; while the left emphasizes child-care programs and other communal things outside of values that would "give parents a hand." I'm also guessing the argument from the right is far more muted in part because social conservatives are far fewer in Canada.
I mention all this because, in truth, I think everyone is missing the point.
Here in America, for example, the biggest problem facing parents today is that, for the most part, neither one of them can be home. The dual-income family is not only the norm in large parts of my country, it's practically a necessity. Why is that? Over the last 50 years, only one major piece of the cost of living has risen dramatically without market fluctuation: the cost of government.
Today, the average American couple pays $14,000 more in taxes than their grandparents did (Americans for Tax Reform). This has made it almost impossible for American couples to feed their children and their governments on one income. As a consequence, not only are American children deprived of time with their parents, but single-parent households are practically doomed to become wards of the state - whether the parent wants it or not.
I go into greater detail about this here and here (note: both are framed in the context of my current Governor's proposed budget), but what I'd like to know is this: does this sound familiar to you folks up there? Do you find the average Canadian family suffers the same reality as the American one, summed up by Bob Dole eleven years ago?
Dole's words were these: "one spouse works full time to support the family, while the other works full time to support the Government." Is that the reality in Canada, too?
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In Canada, working people pay 50% of their income in taxes, whether it's income tax, sales tax, gas tax, etc.
This is not much different from slavery, except that the government "allows" you to keep half for your basic needs, so that a slave rebellion can be prevented - and they can remain in power.
Posted by: obc | 2007-12-18 7:11:11 AM
The dual income family is a necessity because people have unrealistic spending habits. The houses built in the '50's were a comfortable 1,000 sq. ft. Now the houses are 2,000 sq ft. Cars are more expensive. Electronics abounds (Nobody had cable TV, cell phones 3+ TVs and computers, IPODs, etc).
Consumer debt is at an all time high. Families spend a lot of money on interest.
"Today, the average American couple pays $14,000 more in taxes than their grandparents did (Americans for Tax Reform)." Considering that only 1 parent worked 2 generations ago the tax rise is actually quite modest given that it is 2 incomes now to 1 income then.
It is just too simplistic and immature to blame taxes and government.
Posted by: Bob | 2007-12-18 8:23:33 AM
Dual incomes have nothing to do with tax rates
and taxable items. It is the myriad of items taxed and the rate of taxation that has caused taxes to become so high.
My grandparents weren't taxed for healthcare, provincial sales tax, GST, tire tax, gas guzzler tax, tobacco tax, capital gains tax etc. The list goes on. For those who wish to live with their unreasonable spending habits, well that is their choice. Having to pay taxes is not an option.
Posted by: atric | 2007-12-18 8:43:00 AM
It became necessary for families to have two incomes about the time of great liberalization of everything including the handing out of truck loads of money by governments. That would be the 60s. The trucks are still rolling.
The great welfare state was getting off the ground and we needed free everything including monthly payments to stay in our trailer parks and dingy apartments if we didn't like our career choices.
Free medical and dental for the unmotivated goes without saying.
On the other hand it was indeed a time for boosting the great consumer society, so for those more motivated folks who worked, the material rewards were abundant and expected.
To sum up we all got stupid and were bought off one way or another. Now we are paying for that grand ponzy scheme.
Regarding the kids. Yes two parents must work to not only support them, but to provide all the toys and electronic gadgets they demand.
Those lucky and often gorgeous women who have husbands earning enough have it all and stay home are women who don't want stretch marks. Looks bad in a string bikini.
It's too late, the child is spoiled.
It's all up to the tax-man now DJ and the Tax-man do cometh.
Posted by: John West | 2007-12-18 9:22:29 AM
Having lived until a little over a year ago in rural BC and since then in rural Washington (same left Coast), one key difference aside from the lower federal tax rates is the more pronounced assault on the middle class from regulatory costs. Local governments in the US have been green-mailed by senior governments to enforce their myriad of mindless environmental / nanny-state-inspired regulations adding huge costs to housing and any potential business ventures, discouraging many. Small business transaction costs involving employment and local taxes are significantly higher as well. Another difference is the more evolved US sterilization of economic activity from public lands, notably forestry (left Coast phenomenon).
The results are a significant underground economy, wage rates artificially depressed by illegal aliens (lots of them), and a creeping economic stasis.
It is possibly, a sneak preview of Western civilization's demographic decline where you encounter increasingly two classes - working poor and semi-retired or retired people of means (living off capital acquired from better times) with most young people gone to greener Pasteurs or just not around.
Posted by: John Chittick | 2007-12-18 11:12:30 AM
"with most young people gone to greener Pasteurs"
You mean, entering the scientific field of studies? :)
Posted by: obc | 2007-12-18 11:47:52 AM
That should teach me not to rely on Bill Gate's spell checker! Should be "pastures".
Posted by: John Chittick | 2007-12-18 12:11:38 PM
John C. ~
We all do it from time to time. Don't worrrry yourselffff ovvver itttt. :)
Posted by: obc | 2007-12-18 12:15:00 PM
"Why is that?"
As Steve Sailer shows, it's the Dirt gap, mass immigration driving up the price of housing and driving down wages.
"There's a far better fit between Bush's share of the vote and lack of real estate inflation. In Texas, where Republicans have grown in strength over the decades, housing prices are up only 89 percent since 1980, the second lowest growth rate in the country (only Oklahoma has had less housing inflation). In California, however, home prices are up 315 percent since 1980. (First is John Kerry's Massachusetts at 516 percent.)
This restrained land price growth for Texas reflects a bedrock geographic reality about the metropolises of Texas, and of red states as a whole. Red state cities simply have more land available for suburban and exurban expansion because most of them are inland and thus not hemmed in by water, unlike the typical blue state city, which is on an ocean or a Great Lake.
Let's look at the 50 most populous metropolitan areas in the country. Of the ones in blue states, 73 percent of their population lives in cities, such as New York, Los Angeles, and Chicago, where physical growth is restricted by unbridgeable water, compared to only 19 percent of the population of the biggest red state metropolises, such as Dallas, Atlanta, and Phoenix.
The Law of Supply and Demand controls housing prices. The greater supply of available land for suburban expansion in red metropolises keeps house prices down."
No different than the mass immigration of Irish/Germans between 1846-1860, land prices rose on the Atlantic seaboard, wages fell, old stock Americans were not able to ensure their sons a homestead, thus family sizes were restricted and birth rates fell.
Posted by: DJ | 2007-12-18 1:02:01 PM
I agree DJ. The economic history of this country in the last 40 years is the growth of Leviathan, to quote the Fraser Institute. Government theft of our incomes has increased relentlessly regardless of how hard we work. They have effectively cut the family apart by forcing people (mainly mothers) to work to support government's insatiable appetite.
"It's just too simplistic and immature to blame taxes and government" - Bob
Is that your REAL name, Bob?
Sometimes the simplest ideas are the truth, "Bob"
Posted by: Larry | 2007-12-18 7:48:10 PM
DJ, absolutely. While I believe my generation (in general) expects a higher standard of living that we can afford, I believe the big culprit is taxation, no doubt. Taxes (in Canada) eat up more than food, clothing, shelter and transportation COMBINED, when you look at most families' budget.
I've been preaching this for years. It's not only high taxation, but also harsh discrimination against single-income homes, I suspect due to intentional social engineering (at least here in Canada, prolly not as bad in the States).
It's not hard to see. If I do a quick comparison on my income tax software, I can easily verify that a man and wife each earning $40k are =much= better off after taxation than a man earning $80k for his family. The difference is significant - thousands of dollars (I don't remember the exact amount, which would vary by province).
Now that our gov't has confiscated almost half of our incomes, and come down especially hard on single-income families, the next step would be to offer the option of so-called "free" gov't-run daycare. Struggling to make ends meet, I suppose many families would choose this.
Fortunately, our Conservative party put the brakes on gov't daycare (at least for now), by simply giving the money to parents directly.
However, we still have super-high taxes, and state discrimination against single-income families.
Posted by: Joel K. | 2007-12-18 9:01:00 PM
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