The Richer and the Poorer
April 14, 2015 9:47 AM   Subscribe

The Washington Post reports what the rich and poor actually spend their money on, and where

"For the first time, the [Bureau of Labor Statistics] released this data for ten equally sized classes of U.S. households, sorted by income. While the bureau doesn't have data on lobster and filet mignon, the survey does provide a fascinating level of detail."
posted by ourt (52 comments total) 32 users marked this as a favorite
 
Food is such a trival part of the budget in the big picture we should just straight up subsidize food staples and call it a day.
posted by The Whelk at 9:51 AM on April 14, 2015 [9 favorites]


We should just straight-up subsidize all basic needs by giving everyone a basic income and call it a day.
posted by aniola at 9:57 AM on April 14, 2015 [50 favorites]




Lawmakers in several states are urging limits on how welfare recipients use public benefits, suggesting that the poor are buying things like lobster, filet mignon

The poor must be allowed to eat only gruel and hydrogenated vegetable fats.
posted by dng at 9:59 AM on April 14, 2015 [10 favorites]


Suprised to see no mention of debt or debt maintenance here.
posted by Artw at 9:59 AM on April 14, 2015 [6 favorites]


Yeah, think about how many people you know with decent jobs who are still making negative income thanks to debts
posted by The Whelk at 10:01 AM on April 14, 2015 [8 favorites]


But what do they each spend on boots?
posted by yeolcoatl at 10:03 AM on April 14, 2015 [10 favorites]


In case any of you are interested: Vimes 'Boots' theory of socioeconomic unfairness was alluded to in John Oliver's "Municipal Violations" bit.
posted by ourt at 10:10 AM on April 14, 2015 [2 favorites]


I guess you could say that debt is a part of this picture in the form of reducing income and/or increasing the cost of things, but it seems worth at least a token mention.
posted by Artw at 10:16 AM on April 14, 2015


Fantastic Wonkblog article, linked from the OP link: The double-standard of making the poor prove they're worthy of government benefits.
The second issue with these laws is a moral one: We rarely make similar demands of other recipients of government aid. We don't drug-test farmers who receive agriculture subsidies (lest they think about plowing while high!). We don't require Pell Grant recipients to prove that they're pursuing a degree that will get them a real job one day (sorry, no poetry!). We don't require wealthy families who cash in on the home mortgage interest deduction to prove that they don't use their homes as brothels (because surely someone out there does this). The strings that we attach to government aid are attached uniquely for the poor.

That leads us to the third problem, which is a political one. Many, many Americans who do receive these other kinds of government benefits — farm subsidies, student loans, mortgage tax breaks — don't recognize that, like the poor, they get something from government, too. That's because government gives money directly to poor people, but it gives benefits to the rest of us in ways that allow us to tell ourselves that we get nothing from government at all.
brb, going to ask all the college students in line at the grocery store whether they're paying for that [booze/industrial-size bag of Pizza Rolls/filet mignon/birthday cake] with Pell Grant money MY PRECIOUS TAX DOLLARS
posted by divined by radio at 10:17 AM on April 14, 2015 [61 favorites]


Lawmakers in several states are urging limits on how welfare recipients use public benefits, suggesting that the poor are buying things like lobster, filet mignon

The funny thing is, I actually did eat more steak and lobster when I was living under the poverty line than I do now that I'm over it. That's because the grocery store was the only place I could afford to indulge.

Now, if it's a special occasion, I go out to dinner or to the movies (sometimes even both!). I meet friends at the bar and buy a couple of cocktails and an appetizer. Or I go to the museum, or to the bookstore, or to the fair.

When I was low-income, a sufficiently good sale at the grocery store could send me home with a lobster tail and a filet mignon for less than the cost of one evening movie ticket, so guess what I did for my birthday?
posted by northernish at 10:19 AM on April 14, 2015 [19 favorites]


When I lived in Maine, lobster was often cheap as hell. My mom and I could get two lobsters, corn, and potatoes for some pretty small amount of money.

Someone once said in a thread here about food stamps that they didn't think anyone should be able to buy even ice cream with food stamps. This attitude depresses me.
posted by rtha at 10:23 AM on April 14, 2015 [16 favorites]


I notice the WashPo article used timely BLS data.

...countdown to a Republican bill to de-fund the BLS begins now.
posted by aramaic at 10:34 AM on April 14, 2015 [12 favorites]


Wait I thought the goal was to get everyone eating steak and lobster! j/k. But in all seriousness, having people eat well, and according to this data everyone is spend/eating about the same (I doubt that ground truth) they yeah for us!
posted by Agent_X_ at 10:34 AM on April 14, 2015


If those damn poors would just save their money like the rich do, they would have more money for nice things, AND they would be doing their lazy-assed part to stimulate the eeconomy.

Stop eating so much lobster, poor people, and put your money in the bank! The rich need to borrow it. No payday loan interest for these people.


What about that lobster? Fish and seafood account for between 3 percent and 4 percent of the grocery budget for all groups -- $80 per year for the poor, and $222 per year for the wealthiest group.

I love how they conflate the rich spending their food budget on scallops, lobster, and wild caught salmon with the poors spending their budget on store brand mushy pink tuna on sale, 4 for $5.
posted by BlueHorse at 10:37 AM on April 14, 2015 [13 favorites]


Suprised to see no mention of debt or debt maintenance here.

I would bet a good portion of the housing and transportation costs are loans, especially for the lower groups. But it would be interesting to look at debt specifically.
posted by TedW at 10:38 AM on April 14, 2015


Biking or walking to work is something that the wealthy and the destitute do. The middle class apparently commutes by car.

I dunno if riding my bike to work qualifies me as rich, but it should help me get there faster.

Money that's being saved isn't being spent, which means less business for everyone from the dry cleaner on the corner to the owner of a five-star hotel.

Oh no, won't someone think of the bullshit Consumption industries?

I bet there's a lot inefficiency in the food budget difference between rich and poor. Rich people not knowing what a good price is, impulse shopping, brand names for identical products, etc.
posted by indubitable at 10:45 AM on April 14, 2015 [1 favorite]


The Swiss have been considering a minimum income for every citizen for some time now. It's not designed to make anyone rich, but it would allow people to afford basics that they have to scrimp for and worry about presently. Sounds brilliant to me. The Mincome
posted by but no cigar at 11:03 AM on April 14, 2015 [4 favorites]


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.
posted by Legomancer at 11:09 AM on April 14, 2015 [2 favorites]


Legomancer:

Speaking as someone who falls into that wage group and spends more than that 10% of income on food, the answer is probably restaurants. I certainly can't speak for everyone, but I know we go out to eat at least twice a week, which adds up pretty quickly.
posted by tau_ceti at 11:16 AM on April 14, 2015 [5 favorites]


Lawmakers in several states are urging limits on how welfare recipients use public benefits,

I think the end result will have welfare recipients restricted to living on Soylent. It will be overpriced and have limited nutritional value, but we will be able to rest easy knowing that at least the Poors aren't *gasp* ENJOYING food.
posted by happyroach at 11:21 AM on April 14, 2015


I bet there's a lot inefficiency in the food budget difference between rich and poor. Rich people not knowing what a good price is, impulse shopping, brand names for identical products, etc.

Having spent what I like to think of as an illustrative amount of time around both poor and upper middle class groups (the line between "rich" and "titans of the Earth who have escaped the gravity of normal human society"), there is a lot of inefficiency and efficiency on both sides of the aisle. Poor people buy a lot of stupid crap because they feel entitled to it, or because they don't want to admit that it is a bad fit for their budget, or because they live in a world in which they feel that they have no control over how much money they have at any given time, so they spend what they have when they have it as best they can without an eye to the future. Slightly less charitably, because they don't feel like they have any agency over how much money they have, there is no incentive to buy store-brand knock-off cheerios rather than, say, the smallest size of the newest limited edition version of Captain Crunch that costs 40 cents an ounce.

Rich people buy a lot of stupid crap as well, and I imagine that is a lot easier to conceptualize. But I've seen rich people who cut coupons and freeze things they buy in bulk so they can use it for months and months going forward, and I've seen poor people who are so dialed into their budget that buying fast food or going to a bar for a night out seems like an absurdest extravagance, like lighting a cigarette with a $100 bill, or buying a brand new car (I kid, but not by much).
posted by Poppa Bear at 11:22 AM on April 14, 2015 [4 favorites]


BlueHorse: If those damn poors would just save their money like the rich do, they would have more money for nice things, AND they would be doing their lazy-assed part to stimulate the eeconomy.

OK, honestly confused English major here: if you put your money in the bank, does it actually stimulate the economy?

I always understood that in a sort of "bank makes a loan, lady starts a company, hires a guy, who is paid some money, which he puts in the bank…" kind of cycle. But recent events have shown a sharp unwillingness among corporations to use all the cash they are sitting on.

So were you being sarcastic, or did I misunderstand my Econ For Poets?

(I find this data quite interesting, and I do wish it were more granular. Oh, what we could learn if the store-loyalty card databases were open!)
posted by wenestvedt at 11:22 AM on April 14, 2015


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

Organic produce. Shopping at Whole Foods. Wine and Spirits. Prepared foods oriented to Gluten Free, Paleo, and other special diets. Gourmet coffee. And, yes, eating out.

The day I can walk in the grocery store and buy whatever produce, meats, cheese, and sundries tickle my fancy without thinking about price is the day I will consider myself rich.
posted by anastasiav at 11:28 AM on April 14, 2015 [14 favorites]


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

Oh, I can, boy can I. In fact, I kind of do. My closest grocery store is a gourmet market. They sell non-gourmet food (at reasonable prices, actually), but they also have tons and tons of incredibly tasty food.

Fresh pasta, freshly made pasta sauce (I generally don't get this), quality fresh-made tortilla chips, fresh made salsa. And that's before we even venture to the extensive cheese section.

Hell, I could spend 10% of my money on cheese.
posted by el io at 11:43 AM on April 14, 2015 [9 favorites]


OK, honestly confused English major here: if you put your money in the bank, does it actually stimulate the economy?

If there were any actual value to saving money, interest rates on savings account wouldn't be ~0.5%. At that rate, you are better off hiding the money in your mattress. No ATM fees and the banks aren't reporting how much you have to the feds, and you only lose very slightly more to inflation.
posted by Pogo_Fuzzybutt at 11:48 AM on April 14, 2015 [1 favorite]


Poor people buy a lot of stupid crap because they feel entitled to it, or because they don't want to admit that it is a bad fit for their budget, or because they live in a world in which they feel that they have no control over how much money they have at any given time...

...or because they have small, dirty, or no kitchens
...or limited storage space for food
...and/or very limited time and even more limited energy to prepare meals from scratch
...and limited desire to spend x hours soaking beans for y calories when they could get even more calories (which equates to energy--for service jobs, childcare, walking between public transport stops, waiting in line, etc.) in convenience foods that might taste better and take fewer of a person's precious free minutes during a day.

I can't blame anyone for making that calculation in favor of convenience foods, or "stupid crap."
posted by witchen at 11:59 AM on April 14, 2015 [24 favorites]


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

Our household is in the top third of wages and spent 7.5% of our income on food and dining in the past 12 months. So, not quite to your 10% of income threshold, but not terribly far off. And though my wife and I both enjoy good food, it's not all lobster and fillet over here either. We both bring our lunches to work 4 times a week or so. We cook 6 dinners a week at home and don't rely terribly heavily on pre-prepared meals. Though a fair amount of money goes to good beer here and there. I'm not sure what's so baffling.
posted by craven_morhead at 12:00 PM on April 14, 2015 [2 favorites]


Poor people buy a lot of stupid crap because they feel entitled to it, or because they don't want to admit that it is a bad fit for their budget, or because they live in a world in which they feel that they have no control over how much money they have at any given time, so they spend what they have when they have it as best they can without an eye to the future. Slightly less charitably, because they don't feel like they have any agency over how much money they have, there is no incentive to buy store-brand knock-off cheerios rather than, say, the smallest size of the newest limited edition version of Captain Crunch that costs 40 cents an ounce.

As someone who lived off of welfare from ages 0 to 18, who would still probably be considered "poor" by many MeFites' definition, and who has been wholly unable to shake the poverty mindset despite living above the poverty line for the past 15 years, I have to take exception to the reasoning (or lack thereof) attributed to poor folks here.

Poor people buy "stupid crap" not because we think we're entitled to it but because we are actually entitled to it. Rather, we're exactly as entitled to it as everyone else in the world, and if anyone wants to suggest that poor people are somehow uniquely duty-bound to stop ourselves from blowing our money on temporarily joy-making bullshit, I would venture that they are sorely mistaken. Because poor people are very tired of having to pinch pennies, scrounge for change, and trade food stamps for cash just so we can buy motherfucking toilet paper. We are sick of having every single one of our purchases and life decisions moralized and gauged for purity, gauged against lives of privilege, opportunity, and experience we can't even fathom being born into. We are sick of having to pay heartbreaking, spirit-crushing amounts of attention to choices that most people have never been forced to make in anything but an instant.

And we don't just feel like we have no agency over how much money we have: that's just reality. It's incredibly demoralizing to know that your fellow citizens will only feel truly satisfied when you're buying the absolute cheapest, rock-bottom bargain-bin EVERYTHING or getting it for free from someone who isn't them: clothes from Goodwill, food from the pantry, personal care items and school supplies from the church or the shelter. And then we get to deal with being humiliated by all the people who call us out for looking like shit, eating like shit, and feeling like shit all the time, because we usually can't afford to look or eat or feel any other way.

Like, all I wanted when I was a poor kid was name-brand food. I didn't care if it actually tasted better, I just knew that it cost more and so I WANTED IT. So desperately. When I had a name-brand juice box or snack at a friend's house, I would sit back to savor the experience and feel like a king. So whenever I'm feeling sorry for myself as an adult, I'll go buy myself a name-brand box of cereal or whatever, because I can do that now -- no one at the store is going to feel entitled to snipe at me for overspending on paltry shit as long as I'm using my debit card instead of state or federal bennies. I do it as a hat-tip to 10-year-old dbr who wanted nothing more than actual bona fide Wheaties and got government corn flakes (which are actually very tasty) instead. And I do it so I can be reminded to sling a box of Wheaties into the food pantry donation bin, so some other poverty-stricken 10-year-old can bask in the warm and wealthy glow emitted by name-brand food, too.

Frankly, what people tend to consider "stupid crap" when a poor person is buying it -- based on what people whined at my family for buying when I was a kid: fast food, cigarettes, a TV, a microwave, cake, candy, pretty much anything more appetizing than gruel -- is very different than what people tend to consider "stupid crap" when anyone except a poor person is buying it. I'm kidding, of course. Everyone knows people who aren't poor can and should buy whatever they want, no wearied tongue-clucking or judgment required.
posted by divined by radio at 12:25 PM on April 14, 2015 [133 favorites]


Lawmakers in several states are urging limits on how welfare recipients use public benefits, suggesting that the poor are buying things like lobster, filet mignon

And as we all know, the Lord only helps those who Hamburger Help themselves.
posted by Atom Eyes at 12:50 PM on April 14, 2015 [4 favorites]


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

I think the Post fucked up the food-as-share-of-income data. The table that they are presumably working off, Table 1110 which gives means and shares based on deciles and is at the link they give is here: [PDF][XLS]. The data shows that there is a very consistent downward trend on food by income level, from 16.7% share for the lowest decile to 10.5% for the highest - to be more exact, the trend is in food at home, which goes from 11.4% to 5.5% from lowest to highest, while food away from home is 5.5% for the lowest, 5.0% for the highest and bounces around within half a percent of 5% for everybody in between.

That's a really strong trend, while their figure shows exactly the same amount for all three income groups - exact to the pixel, give or take some antialiasing. That implies less than 0.1% difference between the groups; my guess is that someone put in some temp data and didn't update it, or that all the columns accidentally link to the same data point or something.


Of course, that still leaves 10.5% of income for the highest decile spent on food. In terms of fathomability, remember that lots of high income households aren't, you know, rich. If they used the top 3 deciles as the top income category, the cutoff is $73,316 annual household income before taxes;. The highest decile cutoff is $134,016. Top decile households certainly don't face the financial stresses of lower income households, to be sure, but that's not exactly park your boat in your bigger boat rich. The top 3 decile breakpoint could be a median truck driver married to a median bookkeeping clerk, while the top decile could be a nurse married to a cop. Anytime you are talking about the top 10% of incomes (much less the top 30% that the Post is talking about), it's misleading to imply you're talking about the "rich" as commonly envisioned; you need to be talking about the top 1% or less to really be in that group. (Really, the fact that the common vocabulary is "poor", "middle class" and "rich" as if there are only three levels of income as a natural law is a big part of the problem.)

Another obvious thing most people thinking about income levels overlook is household size - these are household level incomes, which makes sense when thinking about consumption. But the lowest decile has an average of 1.7 people and 0.5 workers in the household ("earners" in the "consumer unit" per the BLS terminology) and the highest has an average of 3.2 people, and 2.1 workers. The more workers, the more income, but the more people, the more you have to spend on food.

If you divide the average food-at-home expenditure by the number of people in the household, most US households spend a pretty constant amount on groceries - the lowest decile spends $28.55 per person per week, and the seventh spends $29.55, with a bit of a dip for the fourth and fifth but generally pretty flat. The eighth and ninth deciles spend about $34.50 per person per week, and the highest decile spends $39.81 per person per week. In absolute terms, food away from home is quite a bit different - $13.12 for the lowest decile, and $36.25 for the highest, with most of that gain in the top half of incomes. Here's a figure showing this.

I don't know; to me, paying $10 more or less per week for groceries is eminently fathomable. Even spending $20 more or less on meals out is something I can envision pretty easily.
posted by Homeboy Trouble at 12:57 PM on April 14, 2015 [14 favorites]


Poor people buy a lot of stupid crap because they feel entitled to it, or because they don't want to admit that it is a bad fit for their budget, or because they live in a world in which they feel that they have no control over how much money they have at any given time, so they spend what they have when they have it as best they can without an eye to the future. Slightly less charitably, because they don't feel like they have any agency over how much money they have, there is no incentive to buy store-brand knock-off cheerios rather than, say, the smallest size of the newest limited edition version of Captain Crunch that costs 40 cents an ounce.

I'm impressed that you started with "poor people buy a lot of stupid crap because they feel entitled to it", and still decided you needed to go less charitably than that.
posted by Homeboy Trouble at 12:58 PM on April 14, 2015 [19 favorites]


I'm assuming this is just taxable income so the truly rich aren't really measured.
posted by Artw at 1:04 PM on April 14, 2015 [3 favorites]


The day I can walk in the grocery store and buy whatever produce, meats, cheese, and sundries tickle my fancy without thinking about price is the day I will consider myself rich.

But you're going to look like a poor slob compared to the person who can have Instacart deliver it all to their doorstep.
posted by peeedro at 1:17 PM on April 14, 2015 [2 favorites]


Americans who do receive these other kinds of government benefits — farm subsidies, student loans, mortgage tax breaks — don't recognize that, like the poor, they get something from government, too.

About that mortgage interest deduction...not taking money from someone isn't exactly the same as giving them money.
posted by MikeMc at 2:08 PM on April 14, 2015 [1 favorite]


MikeMc - If my understanding of the mortgage interest deduction is correct, it's a tax deduction for some of the interest that a person pays on a home loan. Meaning, a private loan is taken out with interest due, the interest is paid by the homeowner, and the government refunds some of that interest money as a tax break. This seems like "exactly the same as giving them money." The program is designed to encourage home ownership, which for some reason is more sacrosanct than feeding the poor.
posted by booksarelame at 3:34 PM on April 14, 2015 [7 favorites]


All the ways the federal government tries to keep our fellow Americans from starving to death in the streets amounts to around 10% of the budget. Is it really too much to ask?

46.5 million people needed help with food in 2014, many of them children or seniors. Even with federal programs, it still takes volunteers and charity to meet the need. Most of the working age people getting SNAP have jobs, even if many are underemployed. There simply aren't millions of freeloaders. The rules don't allow for it. No matter how many times the usual suspects repeat that ancient slander [Caution: Very Racist poster from 1866], it isn't true.

And yes, I am very deliberately comparing people who believe "moochers are buying t-bones," even if they leave out "young bucks" most of the time now, with the kind of people who created that Freedman's Bureau poster 150 years ago. If one takes that as an insult — they probably should.
posted by ob1quixote at 4:08 PM on April 14, 2015 [9 favorites]


it's a tax deduction for some of the interest that a person pays on a home loan. Meaning, a private loan is taken out with interest due, the interest is paid by the homeowner, and the government refunds some of that interest money as a tax break.

Ehhh, kinda. What happens is (in nice round numbers) is you pay 12000 in mortgage payments for a year (which is the payment for a 200k loan at today's interest rate-not unusual at all for a house these days in 'flyover country'-ie most of america not in California or northeast coast). Of these 12k lets say 10k is interest (first year of payments). You have an income of 70000 a year (about right for having no more than a 200k mortgage). Ordinarily you would pay income tax on 70k. With the mortgage interest deduction you reduce the income to 60k and are taxed on that. BTW this is exactly the same as it works for all 'deductions', regardless of the amount. So the value you see in tax reduction is your marginal rate of that amount (of that 10k if your marginal rate is 15% you see $1500 reduction in taxes you owe the government-income only-deductions don't apply to social security, medicare, property, etc).

While I agree it is definitely a subsidy or tax break it is not a credit, nor is it taking money out of someones pocket to give to someone else.

(please don't assume I am for OR against welfare based on the above. In general I believe we are all better off with a robust social safety net with a limited scope-so decent benefits with a limit on total payout per person and some money being spent on investments/training/whatever to make that person a self sufficient tax paying citizen-and the biggest beneficiary of tax deducations/credit is big corporations who can lobby for it)
posted by bartonlong at 4:31 PM on April 14, 2015 [1 favorite]


A perfect example of using anecdotal information to shape policy making, and most double-down by using fake anecdotes. The following segments of society are hurt the most by ideological austerity: children, pensioners, the disabled, and veterans.
posted by Brocktoon at 4:39 PM on April 14, 2015 [3 favorites]


Even Arkansas exempted basically everyone from the SNAP limits until the recession hit. They reinstated the work requirement afterwards simply because there was not enough money to continue providing benefits to all the people receiving SNAP. (Arkansas has a balanced budget amendment in their Constituion, so they can't borrow for anything but capital expenditures)

That was before the Teahadists took over, though. Most people prefer not to just let people starve, even if the rhetoric sometimes makes it seem otherwise.
posted by wierdo at 6:01 PM on April 14, 2015


I can't blame anyone for making that calculation in favor of convenience foods, or "stupid crap."

When i had my first real, decent job but was living in a house that probably should have been condemned i realized how this works. With at various times no fridge, mice living in the stove and all kitchen cabinets, or just full of rotting garbage for most of the floorspace because the landlord quit paying the pickup(and threatened to evict if we piled it in the yard, but we eventually did in the driveway anyways).

I ended up eating out at least once every day. The house was on the edge of a poor(er) part of town, so there were places where you could get a whole takeout container of meat/vegetables/sides/etc at a Vietnamese counter service only place for $4, or a sandwich for $2.50.

Pretty quickly i was eating nothing but takeout.

I realized towards the end of this period of my life that i was spending something like $400 a month on eating out. This was like 25% of my income. I could have shaved it, but not having a kitchen is EXPENSIVE. So is not having time to prepare food else you don't even get a moment to sit down and relax, which it's pretty easy to end up in when you're poor and working way too many hours for too little money(and i've been there, too).

This, among other reasons, is why i think "apodments" and a lot of SROs are fucking evil. Having nothing but a mini fridge and a hot plate is basically chaining people to poverty. The options were either eat really depressing, and mostly really unhealthy stuff like canned soups non stop or eat takeout. And pretty quickly you get bored of only eating the cheapest takeout every day and it starts to drive you insane, and then you're paying $5-8 instead of $3-5.

Any situation in which you end up either suffering but doing the "logical" thing or spending way too much to barely have a tolerable but unsustainable situation is essentially rigged.

On the flip side, once i lived somewhere with a working clean kitchen buying cheap stuff, especially in bulk worked out fine and i was eating normal and even pretty good food on a reasonable budget. But fuck was not having a kitchen expensive.
posted by emptythought at 6:31 PM on April 14, 2015 [13 favorites]


I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

We are in that bracket and according to Mint "food and dining" (which should be including everything from grocery shopping to booze to eating out if I am doing this right) is just under 10 percent of our pre-tax income. It's obviously a higher percentage of our post-tax income, and I'm sure there are inaccuracies in how Mint is categorizing things, but it's reasonably close.

I know there have been times when I was poorer that I was spending a larger percentage on food; the figure above is almost entirely cooking at home except for date nights and some lunches out. I don't watch unit prices nearly as closely as I did when I was poorer, but I still keep an eye on them. Food is expensive, and even just buying some medium-nice stuff (not caviar, but things like cheese from the boutique cheese section in the regular supermarket) adds up fast.
posted by Dip Flash at 8:18 PM on April 14, 2015


...nor is it taking money out of someones pocket to give to someone else.

Wouldn't that loss of income to the Gov't require it to be made up from elsewhere, thus very directly being taken out of someone's or more likely multiple someone's pockets? Yes.

Further, by not having to pay that amount, you are getting to keep money that should be otherwise payed which is definitely an increase to your net income.
posted by JakeEXTREME at 8:27 PM on April 14, 2015 [1 favorite]


So the value you see in tax reduction is your marginal rate of that amount (of that 10k if your marginal rate is 15% you see $1500 reduction in taxes you owe the government-income only-deductions don't apply to social security, medicare, property, etc).

This is right, but it only makes sense to itemize if you have more than $12,400 in deductions (standard deduction for a married couple). For a couple without kids, they probably won't get anything for that $12,000 in mortgage payments -- and if they do have kids, it'll still be pretty minimal. The mortgage interest tax credit only significantly helps people who buy $500k+ houses -- ie fairly wealthy people who really don't need any assistance.
posted by miyabo at 9:34 PM on April 14, 2015


Miyabo, deductions can add up very quickly for homeowners.
$10,000 mortgage interest in our thread's example
$2,000 in real estate taxes on the house
$2,000 in state income taxes
$250 in personal property taxes
$500 in charitable contributions (church, etc.)
It's not hard for a homeowner to rack up big numbers, nor does it require exotic interpretations of the tax code. And given that it's a subsidy of those with more money that keeps money away from the programs that aid people with less money, it's a bit of a scam, even though it's one that benefited me.

For the mortgage interest part of that scam, there had been a long-standing argument that home ownership has societal benefit that justifies the subsidy, but even if that's true then the answer is to cap it at a reasonable level, regionally adjusted. The current structure disproportionally shovels money at the rich (at the expense of programs helping the poor) in two ways: the rich buy more expensive houses with bigger mortgages generating more interest, and each of those interest dollars they get to deduct is more valuable to them because it's a deduction against the slice of their income facing the highest marginal tax rate. This last part is why, under the current tax regime, any maneuver available to everyone to reduce taxes actually benefits the rich the most, at the expense of the poor who would receive services from those taxes. It's nuts.

If we decide the societal benefit of home ownership is real, we can still fix both of these problems in the tax structure. Step 1 is the regional cap on mortgage interest deductions I mentioned above. Step 2 is having deductions shield money from taxes starting at the lowest marginal rate a particular payer faces and working up rather than the current sham of starting at the highest and working down.
posted by NortonDC at 8:30 AM on April 15, 2015 [1 favorite]


I was on food stamps for three months while in between jobs and supporting my daughter. I shopped at Costco with an EBT card. I overheard a man in line say that Costco shouldn't accept EBT. I guess I should have been shopping at a convenience store?
posted by waving at 10:40 AM on April 15, 2015 [1 favorite]


“The High Public Cost of Low Wages,” Ken Jacobs, Ian Perry and Jenifer MacGillvary, UC Berkeley Labor Center, 13 April 2015
Stagnating wages and decreased benefits are a problem not only for low-wage workers who increasingly cannot make ends meet, but also for the federal government as well as the 50 state governments that finance the public assistance programs many of these workers and their families turn to. Nearly three-quarters (73 percent) of enrollees in America’s major public support programs are members of working families; the taxpayers bear a significant portion of the hidden costs of low-wage work in America.

Cf. “Crappy-Paying Jobs And Stingy Lawmakers Are What’s Straining Our Welfare System, Not Poor People,” Elisabeth Parker, Addicting Info, 14 April 2015

Cf. “The big lie about families on welfare: they don't work,” Dara Lind, Vox, 14 April 2015
posted by ob1quixote at 11:33 AM on April 15, 2015 [5 favorites]


There is a sizable chunk of the population who have been seduced into being greatly concerned about how those poor people ended up with all our money. To see out in the open the deliberate distortions, propaganda, and relentless flogging it has taken the right wing to create this perception in so many Americans disheartens me to a degree I find difficult to express. If so many feel that the disadvantaged are so undeserving and are in their straits willingly, it is no wonder that charity will never be adequate to address our social problems: so many of us are uncharitable.
posted by Mental Wimp at 12:49 PM on April 15, 2015 [6 favorites]






I cannot fathom being in that top third of wages and still spending 10% of my income on food. That just baffles me.

I think the Post fucked up the food-as-share-of-income data.

Self-serving update: The Post has corrected the error in the food share data. I'm always happy for a day when I find a problem in someone else's data manipulation, rather than my own.
posted by Homeboy Trouble at 4:15 PM on April 16, 2015 [2 favorites]


...and/or very limited time and even more limited energy to prepare meals from scratch

What middle class folks and above have a hard time imagining is just how much this factor determines life for those at the bottom. Chronically not having enough money presents you with so many demands on your time that are non-productive that you barely have time for normal life. We saw this in our study of inner city grade school kids' indoor air quality. The poorest homes had difficulty providing a reliable time we could come and assess and install monitors in their homes because their lives were chaotic and unpredictable. The parents all understood and were supportive of the study and really wanted their kids to participate, but between the two low-paying jobs each had and the transportation challenges, and the relatives who needed help and the legal troubles due to non-payments, etc., they had little control over their time. I was amazed at how well cared for most of their kids were under these kinds of challenges.
posted by Mental Wimp at 9:12 PM on April 16, 2015 [4 favorites]


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