There is an article in the Salt Lake Tribune this morning that states that the charitable deduction on your income taxes is in fact the same thing as any other transfer payment...where your taxes are used as a form of public welfare assistance. This is in fact, a stretch of the truth.
The reason for the charitable deduction on your taxes is to encourage people of means to give to charities. This can be tithing to your church, a donation to the United Way or a gift to the Road Home or some other type of donation. It is believed that if the Government encourages people to give to charities, there will be fewer people coming to Congress with their palms skyward. This is not a transfer payment, because it is tax money that the government will never collect. If you never get the money in the first place, how con it be transferred? It is much like your local Fresh Market offering you a $10 discount on your grocery bill if you donate some of the cans of tuna you purchased to the local food bank. The $10 discount is not, in fact, a cost to the store as it never becomes revenue. The are simply offering a discount to people who are willing to donate to a worthy cause.
Therefore, the income tax deduction and public welfare are two different entities. Now, the article mentions congressional candidate Carl Wimmer and his desire to reduce public welfare payments. There are those who believe that people become dependent on public welfare assistance and never get off. I will admit that this is painting with a broad brush. Most people will have a time in their lives when they will be out of work or suffer some sort of financial crisis in their lives. Some people will in-fact take unemployment and other welfare assistance to get through these tough times. Other people rely on their savings, work second jobs and have assistance for extended families during such times. For some this time in their lives will last only a few weeks. For others, they may never see good times again.
For me, this has happened four times. The first time, it took 2 months to find work again. The second time, it took 8 months. The third time, it was 2 years. And the fourth time it was 3 weeks. In my experience, it was not a function of the overall economy, but a question of how well the skills that I brought to the job market matched what was in demand. So the question is, how does one bridge that gap? Welfare payments, without any accountability on the part of those who receive them are not the answer. You can't yell, "get a job" to someone who does not have the skills that employers are looking for. To cut people off of public assistance will simply leave them begging in the streets. And you think that we have a panhandling problem now?
In my 2-year issue, for six of those months I was unemployed and living with family. That could not be a permanent situation. I took a job that paid 30% over minimum wage and worked hard at it. We had food stamps and medicaid as well and I went back to school. Eventually, after about a year and a half, the company moved me to a position that was closer to the type of work and pay that I had two years earlier. It was at that point that I no longer required public assistance. And that is where I have built my career since. I consider myself fortunate that these opportunities came my way and am grateful for them.
The problem is that most people who are life-time welfare recipients do not know how to work their way out of assistance. It is not that they do not work hard, but it is that they do not know where to turn to improve their lives. Many people still believe that once you reach a certain age, you get a job and work as hard as you can and learn to live off of what you make. Here is the problem. The poverty level in the US is at 22,350 per year. Working at minimum wage will net you 15,080 per year. It is estimated that 58% of Americans will spend at least one year of their lives earning below the poverty level.
If you are single and have no children and a room-mate or two, it is a livable level. A young married couple, with both newlyweds working at minimum wage, they are above the poverty level and doing well for themselves, until children come along. But here is how to escape poverty.
How to escape poverty...
1. Get an education. In 2010, the average starting salary for a college graduate was 48,661. Some make more and some make less out of college, but it is still better than a married couple where both are working minimum wage. It is never to late to begin to get an education, never to late to finish if you started. It is also wise to consider a community college if a four year college is out of the question. These are not degrees to nowhere, especially if you are no where now.
I am not saying that everyone needs a college degree. I am saying that everyone needs training beyond high school. If college is not for you, something else is, and you can make a good living without a degree. There are many programs at your local trade tech school that lead to a rewarding career.
2. Avoid becoming a single parent. I know that this is easier said than done, but the numbers are on your side if both partners in the marriage are working and if they stay married. Consider marriage carefully. Stay married. Wait until you are married to have children.
Now, we are all animals at heart and our basic instincts include those that reproduce our species. Therefore, people will make mistakes. Single parenthood does not have to lead to poverty. There are ways out of that trap, but they are not easy. If you know someone who is a single parent, become part of their support system and make their pathway out of poverty a bit easier.
3. Continue to explore new opportunities. Job security is a thing of the past. It used to be that the price for employee loyalty was job security, but those days are gone. Your loyalty to your employer will buy you little. You may like your boss, but the company you work for does not have the power to love you back. At any time, your shop can close it's doors, even if it is doing well. The owner of the business could retire, could sell the company. Age may make you less effective. A number of things could happen. It does not mean that you change jobs at the drop of a hat, but it is OK to consider new opportunities when they arise.
4. Live on less than what you make. Use debt carefully. Save for the future.
5. Watch for signs of impending layoffs and take action before the final shoe falls. Companies will usually take other steps to cut costs before they cut people. They do not want to lay people off, believe it or not. People are hard to replace. When the company appears to be cutting costs, it is the time to update your resume and put out feelers. Your unemployment will be shorter if you do.
6. Build and maintain a network. This is where Facebook, LinkedIn and other social media can help.
7. Maintain your health. Nothing can take you down like health problems. Take care of your body so that you can continue to earn money.
8. Keep your skills current. Often, the difference between a short layoff and a long layoff if whether or not your skills are current. Go back to school whenever possible and update your knowledge.
These steps out of poverty are not something that you will get from your welfare counselor at the state welfare office. Their job is finished once you make enough money to no longer qualify for assistance. This is where charities and your church can help you. Remember, a person who makes enough not to qualify for public assistance may still get earned income credit and at the federal level may still take away more than they give. But there is not a big bureaucracy needed to make that happen. The goal of any public assistance program should be to get a person, a family to the point where they not only no longer need assistance, but to where their tax payments are greater than the sum total of government assistance. Then we can really reduce the size of the bureaucracy that manages our great public welfare system.
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