HDFS 28000 Chapter 5: Social Class and Poverty

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ochregoat743

5 Oct 2016

School

Purdue University

Department

Human Dev & Family Studies

Course

HDFS 28000

Professor

Franses Elias

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Document Summary

According to gilbert (1998), social classes are groups that are more or less equal in rank and differentiated from other groups above or below them with regard to occupation: education. The failure to have the income necessary to purchase a basic basket of goods and services that allows for a minimally decent level of existence (orshansky, 1963) Approximately 15% of u. s. population is living in poverty (census, 2012) Calculation of federal poverty level (fpl) income necessary for obtaining a minimally abenquate diet during the course of a year x 3. 1/3 adequate diet + 2/3 clothing, housing, utilities. Takes into account family size and inflation. per month for other expenses (housing, utilities, transportation, clothing, child care, medical expenses) Some think fpl is too high: does not take into account program benefits such as medicaid or food stamps. Some think fpl is too low: certain costs, such as housing or child care, have escalated dramatically .

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WRITE a one-sentence summary of each paragraph!

The False Income-Inequality Narrative

BY JASON L. RILEY

Published in the Wall Street Journal on Sept. 29, 2015

An enduring theme of the Democratic presidential race has been income inequality, coupled with an enduring belief that America's affluent reached their status at the expense of the poor and the middle class.

Bernie Sanders speaks of little else on the stump. And when not busy dissembling on her handling of email correspondence at the State Department, Hillary Clinton will tell you that the deck is still stacked in favor of those at the top. If Joe Biden gets in, expect more of the same. The vice president is said to be contemplating a 2016 bid in large part because struggling middle-income families may have trouble relating to Mrs. Clinton on inequality given her high living since leaving the White House.

This theme, in any case, seems to resonate with voters, which is no huge shock in the sixth year of an economic recovery. Envy and resentment fuel class warfare and lackluster economic growth throughout the Obama presidency have made people less optimistic and more inclined to fault others for their circumstances. A Wall Street Journal/NBC News poll this week reports that four-in-five Americans âwere either angry because our political system seems to only be working for the insiders with money and power or anxious and uncertain. After all, the economy still feels rocky and unpredictable or both.

Liberals want to address income disparities through wealth redistribution by taking money from more productive people and giving it to the less productive in the name of fairness as the left defines it. They want to raise income taxes, expand the welfare state, lift minimum wages, and strengthen the bargaining power of unions. Mr. Sanders has been the most explicit about this, even going so far as to propose a wealth tax. Our economic goals have to be redistributing a significant amount of [wealth] back from the top 1%, the senator said in July.

In reality, the left has overstated the problem. And all the focus on divvying up existing wealth instead of creating more risks making matters far worse for the people they are trying to help and the country in general. To the extent that the expanding welfare state allows more people to live without working and therefore without earning income or developing their own human capitalâsupporters of the welfare state are contributing to the very income disparities they so much decry, writes economist Thomas Sowell in his new book, âWealth, Poverty and Politics.

Mr. Sowell is the author of more than 30 books over the past four decades, many having to do with what drives different social and economic outcomes among different groups in the U.S. and elsewhere. In his latest tome, he draws from this well of research to do what he has done so well for so long: question basic assumptions behind public policy and follow the facts where they lead him.

One common assumption is that proportionate or random outcomes are the natural order of things and that gaps or disparities are evidence of something wrong. In fact, huge disparities are the norm, not the exception, because the demographic, cultural, and political factors that influence the development of the human capital that makes people productive also tend to be unequal.

In 2013, only 9% of U.S. women with college degrees who gave birth were unmarried, versus 61% of women who were high-school dropouts and unmarried. Harvard's Robert Putnam reports that children from professional families will hear 19 million more words than their working-class peers before the first day of kindergarten.

These children don't have the same prospects. Equal opportunity, in the sense of being judged and rewarded by the same standards as others, cannot possibly mean equal life chances for children born and raised in these very different settings,writes Mr. Sowell. The fact that life is unfair is not the same as saying that a particular institution, or a particular society, is unfair.

The argument that social mobility is a thing of the past in the U.S. also is disputable. Longitudinal studies by the IRS and others that measure the progress of individuals over time show that the American dream is alive and well. One such paper, published by the Pew Charitable Trusts in 2012, measured whether a person has more or less income, earnings, or wealth than his or her parents did at the same age and concluded that the vast majority of Americans had higher incomes, while 50% had greater wealth.

In other studies, Pew has found generational stagnation but the authors have noted that it didn't apply to immigrants. If low-income immigrants can rise even when the native-born don't, writes Mr. Sowell, that strongly suggests that American society continues to offer opportunities to move up economically, but that not all groups make the same use of these opportunities.

Mr. Riley, a Manhattan Institute senior fellow and Journal contributor is the author of Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed (Encounter Books, 2014).

redalpaca572

46. In a proportional income tax system,

marginal tax rates increase as the level of taxable income increases.

marginal tax rates are the same regardless of the level of taxable income.

everyone pays the same dollar amount in taxes.

marginal tax rates decline as the level of taxable income declines.

47 A tax system that applies a lower marginal tax rate at higher levels of income is

backward.

regressive.

progressive.

proportional.

48 The average tax rate can be calculated by which of the following formulas?

The change in taxes due divided by the change in taxable income

The change in taxable income divided by the change in taxes due

Total taxable income divided by total taxes due

Total taxes due divided by total taxable income

49 Under a progressive income tax system, the marginal income tax rate paid by taxpayers

declines as their incomes increase

. is unrelated to their incomes.

rises as their incomes increase.

is unchanged as their incomes increase.

50 The tax base is the minimum amount of tax revenue that government must collect each year.

the maximum amount of tax revenue that government must collect each year.

the sum of all incomes earned in the United States.

the value of all goods, services, incomes, or wealth subject to taxation.

51 A capital gain is defined as the tax paid when one sells an asset.

the tax rate one pays when one moves into a higher tax bracket.

an unanticipated increase in income.

the positive difference between the sale price and the purchase price of an asset.

52 Corporate profits are

taxed twiceonce by the corporate tax system, and again by personal tax system when they are paid to stockholders as dividends.

taxed only when a stockholder sells his or her shares of stock.

taxed at too low a rate.

taxed three timesonce by the corporate tax system, again by the personal tax system, and again as capital gains.

53 Social Security taxes are regressive because

they apply only to rich people.

they are not applied to income beyond a certain amount.

they are applied to welfare recipients.

they are applied to retired people only.

54 The largest share of federal government tax receipts is derived from

excise taxes.

individual income taxes.

corporate income taxes.

social insurance contributions.

55 Local government expenditures depend on which taxes?

Social Security taxes

Local property, sales, and excise taxes

Capital gains taxes

Revenues from licenses and permits

56 When the purchase price of an asset is less than its sale price, then there is a

budget deficit.

corporate income tax.

capital gain.

capital loss.

57 The earnings that a corporation saves for investment in other productive activities are

transfers in kind. c

apital gains.

tax incidence.

retained earnings.

58 Tax incidence refers to

determining who sends the taxes into the government.

the distribution of tax burdens among groups, or who really pays a tax.

the tendency of some people to avoid paying taxes at all.

determining the marginal tax rate applied to any increase in income.

59 Social Security taxes are paid by

neither employers nor employees

both employers and employees.

employers only.

employees only.

ivoryfrog360

1. With regard to health care spending patterns, we can say that

A. Everybody demands the same basic level of health care

B. Health care spending varies dramatically according to governments willingness to pay for such services

C. Men demand much more medical care than women

D. The elderly need much less health care than adults do

E. Only a few people (less than 5 percent) consume more than half of all health care expenditures

2. Which of the following is the best example of a renewable resource?

A. Crude petroleum

B. The ozone layer in the atmosphere

C. Library book

D. Minerals

E. Trees

3. All of the following are reasons for health care expenditures in the U.S. Rising EXCEPT

A. The government (FDA) restricts entry of drugs to the U.S. Marketplace

B. The demand for health care has risen

C. The federal government has had such a small role in health care

D. The supply of physicians is restricted by the American medical association

E. Health insurance is regulated on a state by state basis so someone cannot buy a less expensive policy from an insurer in another state

4. Free market economists argue that

A. Markets will not adjust to a demand shock without government intervention

B. Markets will adjust to a demand shock without government intervention

C. Central planners are best equipped to handle external shocks and get the economy back on track

D. It would take the government too long to intervene and get the economy back on track

E. Government intervention is necessary to get the economy back on track

5. True or false? The health care restrictions and regulations prevent the entry and exit of firms and prevent the effect of competition on prices.

6. True or false? In a market system, those who own the most highly valued resources have the highest incomes.

7. True or false? Since consumers do not have to choose whether to use their own money for health care or for something else, the role of price as an allocation mechanism does not work in health care.

8. Health economics is important to study for all of the following reasons EXCEPT

A. Spending on health care in the U.S. exceeds $2 trillion

B. The elderly are the smallest users of health care, and the young are the major users

C. Only 1% of the population account for almost 30% of total health care expenditures

D. Health care expenditures have risen from 5.9% of GDP in 1965 to over 16% of GDP today

E. None - all of these are true

9. An illegal drug dealer will maximize profit by providing and selling the number of drugs where

A. Private costs equal social costs

B. The greatest number of consumers can be derived

C. The price is maximized

D. Private property rights are best defined

E. Marginal revenue equals marginal cost

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HDFS 28000 Chapter 5: Social Class and Poverty

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