The so-called poverty line is a precise number that is set each year according to whether people
Question:
The so-called "poverty line" is a precise number that is set each year according to whether people are classified as "farm" or "nonfarm" and the number of people in the family or household. But few people have a very good idea of exactly what the poverty line really means. The U.S. system of defining "poverty" says nothing about relative economic standing. That is, by linking poverty to nutrition, we pay little attention to the fact that some households have far more income than others. In the nations of Western Europe, a different and more left-leaning way of defining poverty is applied that focuses on the poverty of some relative to the national average.
While the precise calculations vary from place to place, the general idea is that the poverty line is set at about 60 percent of the median income level. Under such a system, people will be defined as poor not because of their income level in absolute terms, but because their income is too far below that of typical people. To illustrate this difference, look at the data for the United States for 2014. The official poverty line for a nonfarm family of four was set at $24,230 (defining 14.8 percent of the population as poor). Under the European system, the poverty line would be set at 60 percent of the median family income of $62,000, or $37,200. Using this measure, the extent of our country's "poverty problem" doubles to include about 30 percent of the population.
This week's discussion is also a small activity: Using the poverty line data presented here:Poverty Guidelines calculate the one-day rate for one person at the poverty line - calculate how much of that money should be used for food. For example, for a family of two the poverty threshold is $19720 per year (divide that by 12 to calculate your monthly allowance - $1643.66). You then need to calculate your expenses (e.g. rent, utilities, car, etc.) and subtract that amount from the $1436.66 and what is left over is to be spent on food for the month. You then take your monthly food allowance and divide that by 28 to calculate how much money you can spend on food for two people for an entire day. After you have calculated your daily food allowance, spend the next day experiencing what it would be like to spend only that amount of money on your food.
Afterwards, discuss with your group what it means to be hungry. Could you even do it? Think about the long-term effects - a person's health, their power of concentration, etc.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill