Unearned income

“ Beyond that limit all that he earns is sheer waste, and uneconomic remuneration which evokes no further effort. Upon that surplus, and upon that only, do the new taxes operate. The argument from unemployment is more specious. It is that, deprived of the money required for income tax and death duties, the more prosperous citizens will be compelled to dismiss some of their servants. ”

“ How can poor families consume more than they earn? Many supplement their income through welfare, Food Stamps, unemployment benefits, Medicare, Medic­aid, school lunches, rent subsidies and other programs, all of which the statistics leave uncounted. And the poverty statis­tics ignore wealth, which can be more important than current income. Workers temporarily laid off don’t get paychecks but they often have savings to fall back on. Although many retirees earn low in­comes, their houses, cars and furnishings are paid for, and they’ve got nest eggs. ”

“ Outlook, chapter 2, “Making the most of the minimum: statutory minimum wages, employment and poverty”:
(1) “High marginal effective tax rates associated with the phase-out range of the benefit give rise to disincentives to increase earned income beyond a certain limit.” (p55) . This is the poverty trap - that however does not exist. When there are ample employment opportunities, people on benefit can be fined if they reject reasonable job offers. (Above minimum income, there also is the dynamic marginal rate.) ”

“ It is a sad reflection that for the vast majority of our people there is no such thing as security of tenure of employment. The profits assessed to income tax, the income, that is, of about one-ninth of our population, continue to rise by leaps and bounds, but the state of employment remains very much as it was. ”

“ We must say just this—the Unemployed are the victims of the Unemployable, and all working men suffer to support the idle and worthless classes of the community.
Every one suffers, every one has to pay for the maintenance of the Unemployable. But the working man pays most and suffers most. Let me put it to the working men here to-night.
Out of every pound I earn I have to pay a shilling to the Government in income-tax. I call this hard, because every penny of my income is made by hard mental work. ”

“ It has been further objected, that since the rich have the greatest means of saving, any privilege given to savings is an advantage bestowed on the rich at the expense of the poor. I answer, that it is bestowed on them only in proportion as they abdicate the personal use of their riches; in proportion as they divert their income from the supply of their own wants, to a productive investment, through which, instead of being consumed by themselves, it is distributed in wages among the poor. ”

“ Unemployment has fallen below five percent. Last year, the typical household saw its income grow by about twenty-eight hundred dollars – the biggest one-year increase ever. And the uninsured rate is at an all-time low. ”

“ Even this correction, however, would leave the great majority of our farmers under the £160 income tax line.
These notes on some of the largest classes of persons which go to make up the order of incomes immediately under consideration will serve to show that we are dealing with working men and working women whose earnings are exceedingly small. It should also be remembered that many of them are subject to losses from terms of unemployment. Clerks and the poorer travellers have little security of tenure, and at any given time there are many out of work. ”

“ The actual amounts paid to the men and women who do the work of the industrial world are extremely small. Current wage rates, placed side by side with the expense accounts of thousands of families whose sole claim to income rests upon their ownership of property, are startling in their paucity. Five hundred dollars a year paid to an able-bodied man whose back was bent three hundred days of the year in his efforts to support a wife and four small children ”

“ A wrong economic policy causes unemployment and poverty, and then some people have more such spells than others. The crucial point is to get rid of unemployment in the first place, not study its dynamics.
(2) “Despite substantial economic growth in the OECD area during recent decades, a significant portion of the population consists of individuals whose household income does not support living conditions considered adequate in their country of residence. Individuals living under such conditions are typically labelled as being in poverty, even if their physical subsistence needs can be met.” ”

“ The first appearance of hard times is followed by a decrease in the working force. The least curtailment in orders leads to part-time work. Wage rates are not cut—that method is crude and disastrous—but men and women are laid off temporarily or permanently. Bonds still draw their interest; the dividends are paid on stocks; and labor waits for a job. The defender of property income will say at once,—"If there is nothing to do, why pay labor?" ”

“ The scale of living of the -1.7 people deteriorates. That of the +1.7 people improves prima facie, but in the last analysis it does not improve so much as it seems to, or perhaps does not improve at all, for the reason that by the curtailment of the share of property and management in the national income there is a curtailment of savings and the production of capital goods, which in ultimate consequences is most adverse to the wage-earners themselves. ”

“ Although the evidence upon this point is by no means conclusive, it seems probable that the income of the wage-earning classes as an aggregate is growing even more rapidly than that of the capitalist classes. ”

“ But secondly, even the 'occupied' classes must be considered not merely as earning income but as furnishing in their private capacity utilities to the community or to their families on which a value may properly be placed. There is no difficulty in seeing that in an estimate of 'living capital' some allowance must he made for the people themselves (apart from their wealth-producing power) —the difficulty is to determine the most reasonable measure. ”

“ Now, here are two men of equal incomes—that of the one derived from the exertion of his labor, that of the other from the rent of land. Is it just that they should equally contribute to the expenses of the state? Evidently not. The income of the one represents wealth he creates and adds to the general wealth of the state; the income of the other represents merely wealth that he takes from the general stock, returning nothing.418 The right of the one to the enjoyment of his income rests on the warrant of nature, which returns wealth to labor ”

“ But during the last few years a new factor has entered into the money problems of the individual, often adding to his trials, often adding to his self-made excuses, and especially burdensome to the man on fixed income. We refer to the high cost of living. Here it is, however, that the wage earner can do something in self-protection, for the level of prices may be in some measure affected by his policy in handling his earnings. ”

“ The insolvency of the wage-earning class is recognized by Gregory King in his calculations of the income and expense of the several Families of England, for the year 1680. All other classes, including artisans and handicrafts show a balance of income over expenditure but the families of seamen, labourers and soldiers show an actual yearly deficit. ”

“ In addition to this, the country loses the wage earner's production. Sometimes death brings to the family permanent loss of income, and to the nation complete loss of the product of the wage earner's work. The nation spends large sums of money every year in providing for dependent families and individuals.
If each of the 38 million wage earners in the United States in 1910 lost 6 days from work in a year, how many days' work would the nation lose? ”

“ In every town and village men, willing to work, stand idle. Even their misfortune does not end with themselves, for not only are they a tax upon their friends, lessening to some extent the meager income of those who give them temporary assistance, but their necessary and eager competition for the little work that offers, tends to reduce the compensation of those to whom they are thus indebted. ”

“ Thus public works even of doubtful utility may pay for themselves over and over again at a time of severe unemployment, if only from the diminished cost of relief expenditure, provided that we can assume that a smaller proportion of income is saved when unemployment is greater; ”

“ Notwithstanding the frequency of cases of this sort, it is, we think, clear that a majority of those who, in any given state of trade, come into distress through long-continued unemployment or chronic "under-employment," are—with many individual exceptions—either the less strong or the less fit, the less skilled or the less capable, the less responsible or the less regular in their industry of the wage-earning community. ”

“ The surplus beyond interest depends on the life of the individual, and even on his continuance in business, and is entitled to the full amount of exemption allowed to terminable incomes. It has also, I conceive, a just claim to a further amount of exemption in consideration of its precariousness. An income which some not unusual vicissitude may reduce to nothing, or even convert into a loss, is not the same thing to the feelings of the possessor as a permanent income of 1000l. ”

“ In the present case there is the move to full employment under price stability. The present unemployed will find jobs. The higher productivity group will have a theoretically larger risk of unemployment, but in practice this risk will be modest as in the 1950s. The real gain for the higher income earners will come from the services that will be provided by the jobs of the presently unemployed. So you do not need to reduce taxes for the higher paid, since they already will have a real gain at current income. ”

“ To ensure a decent stardard of living, required gross income then rose and exceeded productivity in the low end of the market, generating unemployment, while shifting the Phillips curve and reducing its sensitivity.
· Even when the statutory tax system has a low exemption level, then subsidies for the lowly productive keep them in work. And subsidies can be at the firm or state level. ”

“ When men who do not employ labourers, are obliged to pay a portion of the earnings of those employed by their neighbours—when thieves and robbers are supported at the public expense—when prostitutes with illegitimate children receive larger allowance from the overseers of the poor than honest widows with their legitimate offspring—when able-bodied men, refusing to work, are supported with weekly stipends, equal to the wages of honest industry, can we he surprised at the enormous increase of the poor rates? ”

“ On the contrary, if his expenditure should in any instance exceed his income, he—as a mere tenant for life—is in danger of being obliged to borrow on annuity, a process which, once begun, proceeds generally and almost necessarily to the exhaustion of the life income. ”

“ The purpose of the Act was to give prompt if only partial replacement of wages to the unemployed, to enable workers 'to tide themselves over, until they get back to their old work or find other employment, without having to resort to relief.' [12] Unemployment benefits provide cash to a newly unemployed worker 'at a time when otherwise he would have nothing to spend,' [13] serving to maintain the recipient at subsistence levels without the necessity of his turning to welfare or private charity. ”

“ Our New Society, addressing itself to the neglected rural and urban poor, has enabled the farmers in some areas to double and in some areas to treble their income- Unemployment has considerably decreased—from 7 percent in 1972 to 3.9 percent in the present year. Our people in general have become self-sufficient in staples, while government income has increased from ?5.75 billion in 1972 to ?22.4 billion this year. ”

“ He found that his regular income of forty-five pounds a year, secured to him by his friends and patrons, was quite insufficient, with his new wants and desires, to cover his expenditure, and the profits derived from his books being fluctuating and altogether inconsiderable, he experienced the worst pangs of poverty in the terrible knowledge of being constantly in debt. ”

“ Considered with reference to the possible maximum of welfare of the individuals themselves, the apportionment of their incomes in time is frequently woful. It is uneconomic for families of small income to save through buying less food than is needed to keep them in health; but it is likewise uneconomic to spend the income, when work is plentiful and wages good, for expensive foods having little nutriment and then, for lack of savings, to go badly underfed when work is slack and wages are small. ”

“ The income of the one is charged with the support of six, eight, or ten persons; the income of the other with that of but a single person. But it may be said that this is a difficulty that cannot be got over; that it is nature herself that brings human beings helpless into the world and devolves their support upon the parents, providing in compensation therefore her own sweet and great rewards. ”

“ In periods of activity such classes of labor are frequently overtasked, while in times of depressed trade their earnings are generally decreased by actual reduction of wages, or variable employment, to a bare subsistence. Then, when disability or old age overtakes them, few possess reserve earnings from which to draw for the necessaries of life. ”