The poor middle class taking it in the shorts again.

http://www.msnbc.msn.com/id/21309318/

Their numbers are bogus, for a family of 4, with a mortgage that high, they would be paying almost 0 fed tax.

I have a family of 5 with the same annual mortgage, and I pay a LOT in federal tax. And they are including things like state and local sales tax, gas tax, etc. which most Americans pay.

(Pretty knee-jerk dismissal of the numbers, Nwokie. Think before you post.)

Then go to FAUXNews and find the right figures that will suit you..... Or find another News source that has the right figures. But I don't think the MSNBC would just be throwing figures out there without checking them first.
Oh, that's RIGHT FAUXNews does....

I pay a BOAT LOAD in Fed tax every Fin year myself...
Nwokie...
No family???

73,700 gross
-10,500 mortgage
-1970 health insurance
-6000 (fed ded for state taxes)
-13200 (3300*4)
-------
42000 Taxable income, and with a little work, and knowing a little more about their specifics, I could probably get it down to below 20,000.

and if the kids are under 17, they get a 1000 tax credit per kid.They could get all their taxes paid back, + some.

Depending on the circumstances, the child care is deductable. If they have an IRA, thats non taxable, etc.

So is 24,500 poor?

Are you talking net or gross?

If you have 24,500 after house payments, taxes, medical, business exp, etc. Your probably lower middle class.

"If you have 24,500 after house payments, taxes, medical, business exp, etc. Your probably lower middle class."

That "etc" toward the end is crucial. If they have $24.5k of totally discretionary income then they are pretty well off ($2000 per month to have fun with). But that $24.5k likely has to be used to contribute to their own medical insurance, college savings, gasoline (this has gotten big recently), food, heating bills, cable, cell phone, etc.

Our family income mirrors the example given pretty closely, and in the average month we end up with less than $300 a month in discretionary income (and none during the holidays). Every dollar is committed, and we live very frugally (no credit card debt, no car payments, only an $1150/mo mortgage).

The fact that most families cannot get by decently without two incomes says a lot. Though I know from experience that the cost of having both parents work, especially while the kids are young, is not necessarily worth it, financially or developmentally for the children.

Here, I'll throw this into the mix. This from Reuters:

-----------------Housing To Hurt Economy For Some Time-----------------
By David Lawder

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson warned on Tuesday that a housing downturn would hurt the economy for some time, and he called for assistance to struggling homeowners and new mortgage regulations.

We have to change our mindset. Our consumption attitude is really hurting us.

The houses we're building today are 2-3 times the size we built in the 70s and 80s. We fill our homes up with so much junk that we have to find storage units to put our excess stuff. The storage business is booming because we have too much stuff.

Then the other attitude is "what's mine is mine" really hurts any community building and creates animosity within neighborhoods, social classes, religious and race. We are a pretty selfish country and we can't even take care of our own impoverished people.

But American's will not change collectively so it's going to be individual families and communities that choose a more scaled back lifestyle. We work hard in our house to clear out the junk on a monthly basis. We see buying clothes and appliances as investments based on need. We are fortunate that we have paid off our mortgage and live in area where we can walk or bike to most of our appointments, and of course working from home is a great bonus.

But it took us years to get here and we have been doing it for years.

I decided to read all 3 pages of the article before commenting. Nothing terribly earth-shattering in there.

I'm going to guess the illustrations are a little skewed since the representations are from a book, and it doesn't say that it takes anything into account such as regional attitude shifts, actual expenses, etc.

42000 Taxable income, and with a little work, and knowing a little more about their specifics, I could probably get it down to below 20,000.

and if the kids are under 17, they get a 1000 tax credit per kid.They could get all their taxes paid back, + some.

Depending on the circumstances, the child care is deductable. If they have an IRA, thats non taxable, etc.

Anyone that's spent any amount of time dealing with the IRS or Oregon Department of Revenue can probably tell you those generalizations are not always the case. Federal Married Filing Jointly standard deduction is $10,700, so if someone's allowable medical, mortgage, state taxes, and anything else that's on Schedule A is at or below that amount, there's no tax benefit to any of those. Around here, Oregon at least used to say you can itemize for state tax purposes if they're below the Federal standard deduction but above state standard deduction (except for the state tax deduction, obviously).

The "kids are under 17" Child Tax Credit has some crazy quirks in it as well, and Earned Income Credit (paid for out of Social Security money, folks) phases out completely at $39,783 of income in 2007. The child care credit has other, different, extremely narrow qualifiers as well. The first two are the only 'paid back and then some' on the tax form.

Also, people are being told to put their money into Roth IRAs... no deduction there. They're told the benefit is they might be able to withdraw it without any taxes later on - not enough emphasis is put on the "might." I wonder if anyone has realized that people can save by putting their money into almost anything... regular savings, an online money market account with a proven bank which pays more interest, mutual funds, etc... any competent banker/broker can set someone up with an investment that's similar to one in a retirement plan account so people have money for emergencies and general savings without the tax penalties for withdrawing it from a retirement account.

Oh, and did I mention that for most deductions and credits on tax forms, that they're based on "Adjusted Gross Income," which is figured before taking into consideration any standard or itemized deductions or personal exemptions? There's some great reading in the 1040 instructions every year for people that actually take the time to read it.

You put a percentage into a "cafeteria" plan, I forget the exact IRS code, that money is nontaxable, and you use it to pay your health insurance, and any other medicle bills.

You use that to pay your medical insurance and any other medicle related bills.

Pardon me if this sounds somewhat offensive:

What I got out of this article, especially looking at the table comparing expenses in the 1970s to today, is that if one of the parents in a two-income household has a low-paying job, this ends up putting the family behind economically compared to where it would be if that parent stayed home to take care of the children. In other words, the second income has to offset the costs of childcare and extra transportation.

The Childcare is deductible if Gross Income is below $75,000. If they work in a small company there is usually no cafeteria plan for daycare expenses.

Nwokie stop spreading the Urban Legends.

Thank you, SaveItNow, since most people out there work for small companies with very little (if any) in the way of employee benefits.

TrickleDOWN doesn't work!!!!!!!!!!