It Doesn't Pay To Save If You're Poor

[dgridley]

Here’s a question. You don’t have a whole lot of money and I want you to save more. So I create a plan where for every dollar you save, I will take away $2.90 worth of benefits from you. How likely are you to want to save money?

That is exactly what a new study reveals — that the government has made extensive incentives for the poor not to save money. Yes, that’s correct. If you are poor, the way the system is currently set up you are better off not trying to save any money.

While one would think the government would want to encourage the poor to save, under the current system, low-income households must pay astronomical penalties if they decide to save money, according to the report by the National Center for Policy Analysis. For example, each dollar a single mother earning $15,000 a year saves ends up costing her $2.60 in higher taxes and lost government benefits for an effective marginal tax on savings of 260%. Save a dollar, lose $2.60 in higher taxes and benefits.

more: http://www.savingadvice.com/blog/2007/06/07/101519_why-the-poor-are-crazy-to-save-money.html

:hi:

 

[bizwiz]

Thats just sad. The government must work for the benefit of the poor so they can rise out of poverty and not the other way around.

 

[shockie]

sounds like poor people need to learn how to launder money :notme:

 

[dgridley]

That's exactly what happens.. the agencies take away your ability to acquire, accumulate, and save money for one reason: they need to keep the funding for their social works programs and can't do it if they have no clients. So, in effect, they do what they can to keep people on the welfare roles IMO. Then people have to do what they can to hide income to get off the roles... it's a vicious circle.

sounds like poor people need to learn how to launder money :notme:

 

[dna]

Welfare isn't designed to help people save money.
Get off welfare first.

 

[dgridley]

Have you ever been on welfare? Did you miss my point?

Welfare, if you happen to be on it, requires that you report every dollar you make.. if you make past a certain point, you're ineligible for welfare benefits that month, meaning people cannot save enough or work enough to enable themselves to get off welfare and stay off welfare. The programs are designed that way, I'm convinced, for the very reason I stated above.. they need you to stay on welfare so they continue to get funding.

Welfare isn't designed to help people save money.
Get off welfare first.