The economy is actually bad

[Lexington Steele]

End of Pandemic-Era Expanded Federal Tax Programs Results in Lower Income, Higher Poverty

The expiration of expansions to federal programs during COVID-19 resulted in lower post-tax household income and higher poverty rates.

www.census.gov

End of Pandemic-Era Expanded Federal Tax Programs Results in Lower Income, Higher Poverty​

September 12, 2023
Written by:
John Creamer and Matt Unrath

Real median household income after taxes fell 8.8% to $64,240 from 2021 to 2022 and the poverty rate after taxes as measured by the Supplemental Poverty Measure (SPM) increased 59% to 12.4%.

These significant changes in after-tax income and poverty rates of U.S. households were much larger than the annual changes in before-tax income and poverty, according to U.S. Census Bureau data released today.

The Census Bureau reports, Income in the United States: 2022 and Poverty in the United States: 2022, show that before taxes, median household income declined 2.3% to $74,580 and the poverty rate (11.5%), as measured by the official poverty measure, was not statistically different from 2021.

This dramatic difference can be attributed to key changes in federal tax policy.

In 2022, several policies enacted by the American Rescue Plan Act (ARPA) expired, including an expansion of the Earned Income Tax Credit (EITC) for filers without children and full refundability of the Child Tax Credit (CTC) and Child and Dependent Care Tax Credit (CDCTC). ARPA also increased the maximum amount of CTC.

In 2020 and 2021, most households also received Economic Impact Payments (EIP) that were no longer issued in 2022.

The rollback of these tax policies had the largest effect on post-tax income among the nation’s lowest-income households.

In 2021, for example, post-tax income at the 10th percentile, meaning at the bottom of the income distribution, was 17.1% higher than the corresponding pretax income estimate, reflecting the substantial boost that lower-income households received that year from the EIP and expanded CTC.

In contrast, the 2022 estimates of pretax and post-tax income at the 10th percentile were not significantly different (Figure 1).

Lower post-tax income, particularly at the bottom of the income distribution, also resulted in an increase in income inequality.

The Gini index, a common measure of how spread out or unequal incomes are, for pretax income was 1.2% lower in 2022 than in 2021, reflecting real income declines at the top of the income distribution. However, the post-tax Gini index was 3.2% higher due to substantial declines in post-tax income among lower-income households.

 

[Lexington Steele]

Lower Income, Higher Poverty​

The decline in post-tax income also corresponds to an increase in the SPM, which incorporates noncash government assistance programs like the Supplemental Nutritional Assistance Program (SNAP) and taxes, through income and payroll taxes and refundable tax credits like the CTC and EITC.
The 4.6 percentage point increase in the SPM poverty rate was driven almost entirely by the change in tax policy (Figure 2). When a version of the SPM excluding taxes is examined, the poverty rate did not change: 12.6% in 2022, not statistically different from 2021.

The expiration of expansions to refundable tax credits had a particularly important impact on SPM poverty (Figure 3).

In 2021, 9.6 million people were kept out of poverty due to refundable tax credits. This number declined to 6.4 million in 2022 as the pandemic era expansions expired. The effect declined for each of the major age groups, with 3.5 million children lifted out of poverty in 2022 compared to 4.9 million in 2021.

More information on Income and Poverty is available in the reports Income in the United States: 2022 and Poverty in the United States: 2022

The technical documentation page includes information on confidentiality protection, methodology, sampling and nonsampling error, and definitions. All comparative statements in this report have undergone statistical testing, and, unless otherwise noted, all comparisons are statistically significant at the 90 percent significance level.

 

[Ol’Otis]

Well duh

 

[Lexington Steele]

https://www.axios.com/2023/09/13/poverty-income-inflation-health-insurance-pandemic-biden

End of pandemic-era safety net programs increased poverty​

U.S. supplemental poverty rate among people under 18​

Annually; 2009-2022
Blue line chart showing the U.S. supplemental poverty rate for people under 18 from 2009 to 2022. It was 17% in 2009 and decreased to 5.2% in 2021. It then went up to 12.4% in 2022.

The expected spike in poverty — particularly child poverty — between 2021 and 2022 shows the impact of letting major pandemic-era safety net program expansions expire, a policy experiment with no precedent in the U.S.

Why it matters: The pandemic programs were enacted as temporary measures. But their expiration still stings for the Americans who experienced an economic boost only to lose it — and there's more to come.

Driving the news: Real median household incomes fell by 2.3% in 2022 and the poverty rate increased by 4.6 percentage points to 12.4%, according to data released yesterday by the U.S. Census Bureau.

• Child poverty more than doubled fr0m 5.2% in 2021 to 12.4% in 2022.
• A separate poverty measure that doesn't include government programs found no significant change in poverty from 2021 to 2022 — highlighting the impact of pandemic-era aid.
• The increase in poverty reflects the expiration of the expanded child tax credit and the end of stimulus payments — which occurred as inflation caused the cost of living to rise.

Although more people had health insurance in 2022 than in 2021, this was almost certainly a fleeting phenomenon that has been undone by the unwinding of pandemic-era Medicaid policies.

Between the lines: The conventional wisdom used to be that Washington didn't let benefit programs expire, not least because taking benefits away from people is politically unpopular.

• But that's exactly what happened last year, despite some calls to extend the enhanced child tax credit.
• The economy has subsequently risen to being a dominant issue heading into the 2024 election — and one that President Biden is on the losing side on, according to public opinion polling.
• But Republicans' economic priorities have largely been centered on reducing government spending. "There's a real opening on the right for some bold family policy," said Joe Grogan, director of the Domestic Policy Council under the Trump administration.

What they're saying: "The rise reported today in child poverty is no accident—it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations," Biden said in a statement.


What we're watching: Government relief programs have continued to expire this year, and more still are coming.

• Student loan payments are coming due again next month for the first time in three years, although the Biden administration has announced a new plan that will slash many borrowers' monthly payments.
• At least 6.4 million people have been disenrolled from Medicaid already, per KFF, the majority of which had their coverage terminated for procedural reasons.
• And families with children may feel even deeper economic pain this fall after pandemic-era funding for child care providers expires, which is expected to cause thousands of child care centers to close and millions of children to potentially lose care.

 

[sportscribe]

Did you think all the covid money was for free?

Who did you think was going to foot the bill?

 

[The Fukin Prophecy]

Everyone that's stepped foot in a grocery store knows this, economists have been calling for the inevitable crash since last November...

Powell and the FED going to do their usual bullshyt tomorrow but not expected to raise rates...

 

[Lexington Steele]

Did you think all the covid money was for free?

Who did you think was going to foot the bill?

How about the hundreds of billions Trump demanded printed and handed straight to Wall Street to keep the stock market looking pretty?

Who's footing the bill for that?

Besides, haven't you heard we have infinite money?

 

[Lexington Steele]

Well duh

Right now the pundit class has been tasked with spreading the message, "Actually the economy is great! People just think it's bad because they're hearing people say it's bad."

You'll notice this on TV and social media, if you haven't seen it already.

 

[Roger king]

You are conflating two things , pandemic specific policy safety nets and the US economy. The US economy is in good shape, the US labor market is very strong, the last jobs report in august showed a gain of 187,000 jobs, the labor force participation rate is high meaning folks who want a job can find one and average hourly earnings are up as well and inflation is way down as well. The reason the pandemic policy safety nets like the child tax credit was renewed is due to unanimous opposition from all republicans in congress and a handful of democrats(sinema and joe manchin) to renew it, this programs were design to be temporary relief during the pandemic era

 

[Lexington Steele]

The US economy is in good shape, the US labor market is very strong, the last jobs report in august showed a gain of 187,000 jobs, the labor force participation rate

The economy is actually bad. The labor force participation rate doesn't mean shyt in this world of smartphone app delivery gopher gig work. I noticed you didn't even bother with the unemployment rate since you probably know, as I do, that the unemployment rate hasn't measured unemployment since the 1970's. The economy... is actually bad.

inflation is way down as well.

No it is not. The rate at which inflation is increasing has slowed. This is being misreported everywhere as "inflation is down."

 

[ItsPeople]

You are conflating two things , pandemic specific policy safety nets and the US economy. The US economy is in good shape, the US labor market is very strong, the last jobs report in august showed a gain of 187,000 jobs, the labor force participation rate is high meaning folks who want a job can find one and average hourly earnings are up as well and inflation is way down as well. The reason the pandemic policy safety nets like the child tax credit was renewed is due to unanimous opposition from all republicans in congress and a handful of democrats(sinema and joe manchin) to renew it, this programs were design to be temporary relief during the pandemic era

This means sweet fukk all to people who have to put gas in their car and buy groceries to feed their family.

All this non sense mumbo jumbo is put together by people who have zero attachment to the real world. It’s just a bunch of bean counters looking at stats.

 

[Cobalt Sire]

I made out well from the bandemic, but it did cause major inflation.

 

[Dafunkdoc_Unlimited]

My occupation is recession-proof.

Good luck, brehs.​

 

[Magic Mulatto]

I’m always on the verge of crying myself to sleep knowing how this movie finna end for me as a have-not…

 

[Lexington Steele]

This means sweet fukk all to people who have to put gas in their car and buy groceries to feed their family.

"We raised food prices but people are still buying it. Guess the prices should have been this high all along."



PEOPLE NEED FOOD OR ELSE THEY DIE