Bush's $39,000 family is too good to be true

Economy: Such a clan wouldn't need tax relief - because it already isn't paying taxes.

January 12, 2003|By G. Jefferson Price III | G. Jefferson Price III,PERSPECTIVE EDITOR

Presidents, lately, like to have exemplary Americans in the gallery when they deliver the annual State of the Union address to Congress and the American people.

If Karl Rove & Co. are looking for such people when President Bush delivers the State of the Union this month, they ought to stay away from the family of four earning $39,000 that President Bush mentioned when he unveiled his $670 billion stimulate-the-economy proposal last week.

"A family of four, with two earners and $39,000 in income, will receive more than $1,100 in tax relief. Real money to help pay the bills and push the economy forward," Bush said in Chicago.

Actually, if that family is spending just a bit more than that $1,100 on education and child care for its children, it won't get any tax relief - because it is already paying no taxes, no thanks to the incumbent administration, but due to existing tax relief.

Most of these $39,000-a-year families probably didn't notice that, which is probably a good thing for the guys at 1600 Pennsylvania Ave. who are said not to know the difference between Medicare and Medicaid. These families are too busy making ends meet to get to the fine print of Bush's proposals.

But let's take a look at such a family. Let's say they live in Baltimore. Let's call them Mr. and Mrs. Bawlmer and their two children, Johnny and Jane Bawlmer, ages 12 and 10.

At $39,000 a year - or $3,250 a month - the Bawlmers aren't living in Roland Park, Guilford, Homeland or any other safe city neighborhood. They aren't sending their kids to the Calvert School or Gilman or Bryn Mawr.

No, chances are they're living in a dangerous area of the city and they're sending their kids to substandard public schools, maybe a relatively inexpensive parochial school. The city they live in is broke - the library at their kids' public school is locked because the librarians were just laid off. The state they live in is broke, too - tuition is heading up for the public colleges. And there's not much help ahead for either state or city from the federal government.

Let's look at the Bawlmer family's bare-bones monthly expenses:

Housing - $700 a month

Household expenses - $60

Food - $500

Car payment - $200

Car insurance - $180

Gas and maintenance - $50

Utilities and telephone - $75

Clothing - $35

Health and dental care - $100 (if nobody ever gets very sick).

That brings the Bawlmers to $1,900 a month, or $22,800 a year just for basics. It does not account for buying furniture, replacing a stove or car maintenance beyond oil changes.

Let's say the Bawlmers spend $3,000 a year on entertainment, less than $60 a week, or the cost of taking a family of four to a fast-food restaurant and a movie once a week.

Let's say they want to spend a week in Ocean City once a year. Add another $1,000.

The Bawlmers are at almost $27,000 now, and they certainly are not living in luxury.

(If Mr. Bawlmer spends $5 a day on lunch, add another $1,000 or so. If he stops somewhere and has a couple of beers on his way home from work, it'll cost him about $800 a year. If he happens to be a smoker, add another $800 to $1,000 a year. But without those vices, we are at $27,000.)

Let's say Mr. and Mrs. Bawlmer are both working. He's working fulltime earning $26,000 a year. She's working part-time earning $13,000 a year.

They need someone to look after the children a few days a week. Add $60 to $75 a week, or about $3,000 to $3,900 a year.

So now the Bawlmers are at more than $30,000 a year. They are a extraordinary family, mind you. They have no credit card debt, they never buy any luxuries or anything else they don't absolutely need.

Actually, there are no families like that in America earning $39,000.

But if there were, and the Bawlmers were among them, they would have about $9,000 a year left. That's if they are not saving any money for a rainy day or for life insurance payments or for investing in a retirement plan.

Any family that perfect would probably take that $9,000 and try to secure a better education for their children. And you know what? If they did that, they never would have had to pay taxes, even before Bush announced his big break for America's $39,000 families.

In fact, they wouldn't even have to use the entire $9,000. After the standard deduction, the $39,000-a-year Bawlmer family wouldn't have had to pay any taxes if the parents were spending only $1,200 a year on child care and education for their children. Thanks, that is, to programs that existed before Bush was elected. Part-time babysitters and an inexpensive parochial school would more than take care of that $1,200.

But the Bawlmers aren't noticing this nuance.

It's lost in the daily work of trying to keep together a solid family, lost in the crime news of the day, overshadowed by big, big stories like the imminence of war with Iraq and nuclear threats from North Korea.

They're worried about the condition of their city and state, their front yards and their back yards. And they're not getting much help there from the Bush administration.

Come to think of it, the cost of a war against Iraq is moderately estimated at about $400 billion over two years.

Imagine how much better off the Bawlmers would be if the United States were not committed to war. Why, if you spread $400 billion over about 100 million American families, each family would get $4,000.

Wouldn't that be stimulating.

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