EQUIVALENCE SCALES IN RELATION TO COST OF LIVING

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EQUIVALENCE SCALES IN RELATION TO COST OF LIVING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice).

It should be noted that there is no perfect system; however,  the equivalence scales system is one method that provides a decent measure of eliminating financial discrimination and promotion of financial fairness with respect to cost of living assessments for all members of family units regardless of marital status.

Equivalence scales have been used to provide comparisons of costs of living between different family units (households).  The OECD (Organization for Economic Cooperation and Development) modified equivalence scale and square root equivalence scales are two examples.  The basis for equivalence scales are described as follows:  The needs of a household grow with each additional member but – due to economies of scale in consumption– not in a proportional way. Needs for housing space, electricity, etc. will not be three times as high for a household with three members than for a single person. With the help of equivalence scales each household type in the population is assigned a value in proportion to its needs. The factors commonly taken into account to assign these values are the size of the household and the age of its members (whether they are adults or children).

Table for two equivalence scales (updated March 29, 2017 – full StatsCan table available online):

equivalence scales

Statistics Canada 75F0002M – Section 2 ‘The LIM and proposed Modifications’  (75f0002m) provides an excellent overview of what is happening in Canada.  This paper proposes  modifications to the existing LIM (Low Income Measure) methodology.  “The first is to replace economic family by household as the basic accounting unit in which individuals pool income and enjoy economies of scale in consumption.   Secondly and equally if not more important, household is the international standard in comparative statistical surveys of income and well-being while the economic family concept is rarely employed by other countries.  Under the proposed modification, an individual will be defined as in low-income if the household as a whole is in low-income which in turn will generate different low-income statistics.   Adopting the square root equivalence scale – the square root has declining factors for each subsequent member while the LIM scale does not, and thus flattens out after the third member.. Furthermore, under the Square Root scale one needs only consider how many people are in the family whereas using the LIM scale one needs to keep in mind both the age of family members as well as whether the family is a single parent family”.

Added- December 1, 2017

The following explanation for equivalence scales as applied to LIM (Low Income Measure) has been taken from statcan.gc.ca/nhs-enm/2011

“The equivalence scales are employed to account for the economies of scales in consumption for different family compositions and sizes. A family of two persons needs more income than a single-person family, but not twice as much to maintain the same standard of living. Consequently, if the single-person family needs one unit of income, the two-person family needs more than one but less than two units of income. The equivalence scale system under LIM assigns a one to a single-person family, 1.4 to a two-person family (two adults or one adult and one child under 16 years of age), 1.7 to a three-person family consisting of two adults and one child, etc…….

Table 1 contains the after-tax LIM thresholds for the year 2006. Using data from the Survey of Labour and Income Dynamics (SLID), the estimated median of adjusted after-tax family income is $30,358. Thus the standard LIM threshold is $30,358 ÷ 2 = $15,179. The LIM threshold for a single-person family is simply equal to the standard threshold since its equivalent size is unit. For a family of size 2, since its equivalence scale is 1.4, its LIM threshold would be $15,179 x 1.4 = $21,251…….

2.3 Adopting the squared-root equivalence scale

One of the key ingredients under the LIM methodology is to choose the equivalence scale. In essence, the equivalence scale measures how the consumption of an individual will have to change when her/his family status changes such that her/his level of well-being is maintained. For example, a woman lives alone and consumes a basket of goods and services for given prices and attains a certain level of utility. The problem in identifying the equivalence scale for her is to ask how much she would save if she were to live with somebody else, attaining the same utility level as before. Since a person cannot be living alone and together with somebody at the same time, it is generally impossible to identify the equivalence scale for each individual.

Nevertheless, income/resources pooling and sharing do occur within a family or household and economies of scale in joint consumption exist. For example, if two families, each of size two, were to decide to form a new family of size four, the new family would not need as many cars, stoves and refrigerators as when they were living separately to attain their previous levels of satisfaction. They may also be able to take advantage of bulk pricing and volume discounts. Thus, in practice, the equivalence scale is primarily employed to account for savings accrued in consumption expenditures for people who live together. But the problem is that there is no agreement about the degree and extent of the saving, and hence various equivalence scales have been proposed and employed.

The equivalence scales under LIM were chosen as a rough mid-point of several scales embodied in the various series of LICOs and administrative/legislative scales implied by the municipal budget guides and provincial social assistance levels. As Table 2 shows, they fall in between the Old Organisation for Economic Co-operation and Development (OECD) scales (also known as the Oxford scales) and scales derived by Poulin (1988) from Statistics Canada’s Income Satisfaction Surveys. These equivalence scales have been employed by Statistics Canada to produce the LIM thresholds since 1991, as well as those extended versions to earlier years. LIM’s equivalence scales are also employed by the MBM line.”

CONCLUSION

For those who doubt the validity of equivalence scales, the following link (pdf/CEPE_Echelles_equiv_en.) provides evidence that equivalence scales do work provided they are constantly tweaked for validity in recognition there is no perfect system and evaluation is required for changes over time.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLES-Part 2 of 2

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NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLES–Part 2 of 2

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice).

When politicians, government and the wealthy continue to perpetuate myths that net worth and assets are too difficult to calculate or should not or cannot be included in financial formulas, this continues to make it possible for the wealthy to maintain their wealth and impossible for singles and the poor to maintain or increase their financial well-being thus resulting in financial discrimination and poverty for these groups.

The following three examples show how inclusion or exclusion of net worth and assets perpetuates the myths proposed by financial analysts, politicians, government and the wealthy.

EXAMPLE #1

Affordable Housing (services)

One assistance program in Alberta is Community Housing which is a subsidized rental program. It provides housing to families and individuals who have a low or modest income. Program funding comes from the federal, provincial, and municipal governments.To qualify, applicants must be Canadian Citizens, independent landed immigrants, or government sponsored landed immigrants. Assets and belongings cannot exceed $7,000. Assets include, but are not limited to:

  • bank accounts
  • investments (excluding RRSPs)
  • equity in property
  • equity in a motor vehicle (assessed by reviewing the value in the most current Canadian Red Book)

EXAMPLE #2

Legal Aid Alberta (legalaid)

Financial Eligibility Guidelines – If income falls within the amounts listed below, person(s) may be eligible for legal representation and to have a lawyer appointed.  Representational services are not free. Repayment will be discussed if a lawyer is appointed.  Legal Aid’s Financial Eligibility Guidelines allow the following eligible monthly income for family size of 1 – $1,638, 2 – $2,027, 3 – $2,885, 4 – $3,120, 5 – $3,354 and 6+ – $3,587.

An example of this is an actual court case going on at the present time.  Legal Aid has refused to assist client’s claim of defence for an estimated $25,000 in legal fees.  Legal Aid says client still has a large amount of property ($500,000 mortgage free), $34,000 in savings, tax free savings account (TFSA), and GICs and mutual funds worth another $21,000, plus $570 a month in old-age security payments with monthly expenses of $1,660.  Legal Aid does not give coverage to individuals with assets in excess of $120,000.  Legal Aid states: “client would be left with well over a half a million dollars in assets even after payment of legal fees.”

EXAMPLE #3

Family Tax Credits (tax-credits)

June 11, 2016 Financial Post Personal Finance Plan “Farm Plan Risky for Couple with 4 kids” shows how plethora of tax credits works for this family, Ed 32 and Teresa 33, stay at home spouse have four children ages 5, 3, 1 and newborn.  Government employee Ed brings home $2,680 after monthly tax income.  Net worth is already $502,000 including $200,000 paid for house.  Non taxable Liberal Canada Child Benefit for four children will be $1,811 per month bringing income to $4,491 per month.  (From ages 6 to 17, Canada Child Benefit will be $1,478 per month).

LESSONS LEARNED

These three examples show how the inclusion or exclusion of net worth and assets benefit the wealthy and families more than singles and poor families.  In Example #1, to receive housing assistance only $7,000 is allowed in assets.  Really, that is it? Compare that to Example 3 where a family already having significant net worth will receive benefit upon benefit upon benefit in addition to Family Tax Credits.  In Example #2, this could be said to be a good case where financial fairness has prevailed.  This client has plenty of net worth and assets to pay for $25,000 legal defence.  When the Legal Aid income scales are analyzed, it is apparent they have at least used some form of equivalence scales (finances). Hallelujah, here is one example where a family unit of two is not assessed at a value times two of that of family unit of one!

CONCLUSION

This post is just another example of the blatant hypocrisy and upside-down finances that financial analysts, politicians and government, and families perpetuate by not including net worth and assets in all financial formulas across the board whether they are local, provincial or federal or of a service type such as Legal Aid.  The blatant financial discrimination of singles and the poor continues while the wealthy get to write their own ticket to wealth by paying less and increasing wealth.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLES-Part 1 of 2

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NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLES-Part 1 of 2

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

Past posts on this blog have shown how financial  formulas that do not include net worth and assets in the formulation promote financial discrimination of singles and the poor.

In past posts financial profiles from the Financial Post have been used to show reasons why and how singles are financially discriminated against.  The editor of the Financial Post profiles Andrew Allentuck, published an interesting article on November 9, 2011 “The rich not an easy target for the taxman” (financialpost).

The idea of taxing the rich is back in fashion.  Advocates for hitting wealthy people with extra taxes argue that it would add to national or provincial revenues and counter the maldistribution of wealth in Canada….

Taxing wealth by taxing income is bad economics.  Wealth is a stock while income is a flow, notes Fred O’Riordan, national advisor for tax services with Ernst & Young in Ottawa.  People can be wealthy, but if they are not employed or if they are retired, they may have modest incomes,  In turn, there are people with high incomes who are spendthrifts and do not build up much wealth.  Advocates for taxing the rich have to aim for the right target….

Today, wealth taxes (in Canada) continue to exist at low rates charged as probate fees when estates are wound up.  (These low fees have helped stop flow of monies out of the country as experienced by countries with high probate fees)…..

The problem, Mr. O’Riordan notes, is that wealth is more portable than income and is easily moved by the living. Money can be electronically zipped around the world in seconds.  Moreover, if the wealthy can see special levies coming, they can shift their wealth away from tax assessor’s hands.

Even if a country or a state or a province were to decide to tax wealth, hurdles would be substantial.  Mansions and lavish condos are immovable and therefore easy to tax. Financial assets like stocks and bonds, mutual funds and bank accounts are registered in various places and therefore also are relatively easy to tax.

Wealth taxation gets harder when the target is art hanging on walls, collections of comic books and baseball cards, all of which are subject to tests of authenticity and changing fashions.  When it comes to buried treasure, such as jewels or gold in safe deposit boxes, merely finding assets would be challenging…..

The difficulty of assessing the value of art, furs, jewels and other trappings of wealth would push tax authorities to focus on easy targets.  Houses and condos are a large component of most people’s wealth.  Yet taxes on homes would be regressive, Mr. O’Riordan says.  “Middle-class people would have a higher proportion of their net worth in houses than do the very rich.  Moreover, home equity rises with age as mortgage are paid off.  So a tax on easily measured home prices or values would hit the middle classes and the middle-aged and the elderly harder than they would young families or young people or who have little equity in their houses or condos”, he argues.

Intellectual property like copyrights and patents are even harder to value.  The value of the most powerful form of wealth, human capital, would be a tax appraiser’s nightmare….

Finally, there are questions of how much tax is too much tax.  Income is already taxed via annual returns, then retaxed when spent via sales taxes and the GST or HST, real estate taxes and sin taxes….To tax it again when unspent as wealthy might be widely resisted. Moreover, a tax on savings or, as some might see it, on thrift itself, could drive down national savings.  Businesses needing loans would be driven to borrow abroad.  Rising foreign debt would weaken the dollar.  As Leonard Loboda, a business advisor in Winnipeg explains, “soaking the rich historically defeats investment.”

COMMENTS ON ARTICLE

These comments are in reference to multiple benefits doled out by politicians, government and businesses without regard to net worth and assets.  To do nothing in assessing net worth and assets when handing out benefits is a blatant disregard of and promotes financial discrimination of singles and poor families.  An example of this is past post on family tax credits (program).

“People can be wealthy, but if they are not employed or if they are retired, they may have modest incomes,  In turn, there are people with high incomes who are spendthrifts and do not build up much wealth”.  Really???  Just because wealthy people may not be employed or have modest incomes or are retired does not mean they should receive more benefits than those who are gainfully employed with low incomes and less wealth (example:  family tax credits given in full amount to wealthy families who have low income and many children).  For those with high income who are spendthrifts, isn’t that their problem for being financially irresponsible?   It is also irresponsible for politicians and government to give benefits to this group.  (Family tax credits are only partially doing the right thing by using graduated income levels to reduce benefits for those with higher incomes).

Irresponsible financial behaviours on the part of those holding the wealth–it is irresponsible for those with wealth (applies to all persons regardless of marital status) to seek financial assistance when they have the means to use up some of their net worth and assets.  If persons can’t afford to pay house taxes or afford to  live, but have huge expensive houses, they should sell their homes and move to less expensive dwellings.

Upside down financing–net worth and assets of the wealthy where they often pay less in taxes, but get more in benefits is perpetuated by upside down financing initiated by the wealthy, politicians and government (housing is just one example) (finances).

Financial analysts and think tanks perpetuate financial advice that benefits mostly wealthy and those with more net worth and assets.  True facts about what it costs singles to live is often under-reported.  All the extra benefits given to married or coupled family units are not looked at in one big picture, but rather in isolated statements. Some financial analysts and think tanks do not treat home equity as a retirement asset.  (They believe that replacement rate analysis has as its objective an income that allows one to enjoy a lifestyle comparable to that which existed pre-retirement. They do not include home equity because they accept that the pre-retirement lifestyle for many middle-and moderate-income Canadians include continued homeownership). (financial).  In other words, those who have never been able to afford homeownership deserve to live a lesser lifestyle throughout their lives and into retirement.

When politicians, government and the wealthy continue to perpetuate myths that net worth and assets are too difficult to calculate or should not be included in financial formulas, this continues to make it possible for the wealthy to maintain their wealth and impossible for singles and the poor to maintain or increase their financial well-being thus resulting in financial discrimination for these groups.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

WHAT IS THE POINT OF POLITICS AND POLITICIANS IN FINANCIAL DISCRIMINATION OF SINGLES?

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WHAT IS THE POINT OF POLITICS AND POLITICIANS IN FINANCIAL DISCRIMINATION OF SINGLES?

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

One wonders what is the point of politics and politicians when there is such gross financial discrimination (along with violation of human rights) of singles.

One online review describes the purpose of government and politics as follows:

The purpose of politics is to enable the members of a society to collectively achieve important human goals they cannot otherwise achieve individually. Through negotiation, debate, legislation and other political structures, politics procures safety, order and general welfare within the state. The question of the precise ends of politics is one of the greatest, and most inconclusive, in philosophy, as manifested by the divisive, heated debates among political parties.

Government is the regulation of human activity, and politics consists of the processes by which a society decides the nature and extent of that regulation. There are many theories concerning the proper role of politics and what aspects of human life should be politicized.

Politics is often involved in prescribing the rules that govern interhuman relationships. It determines laws regarding marriage, parenting, businesses and contracts. It creates laws regulating educational institutions and civil associations. Money always plays a big role in politics. Much time goes into deciding where public money will come from and how resources will be spent.

The activities of government, politics and politicians, however, can go very wrong especially when certain members of a population are underserved or not served at all.  An example of this is the cultural genocide of indigenous persons and violation of rights of targeted groups such as non-white persons (example:  In USA implementation of voter ID cards that would make it harder for the poor to vote).

This blog has attempted to show financial discrimination of singles.  In a financial world where parents and children rule, singles are an invisible minority.  This blog has also described how singles are financially excluded in a political world where ‘selective’ social democracy rules (singles).  The last decade has been especially financially unkind to singles in which married or coupled persons and parents with children have received the most benefits from the time they are married until the time they are seniors and then widowed (decades).

Politicians and government, both in Canada and the USA, continue to leave singles out of their discussions.  Politicians refer mostly to the middle class and families.  Singles or individuals are not included in the definition of family.  Benefits continue to be targeted more towards families, children, and the middle class, rather than singles and the poor.

Some of the reasons for the financial discrimination of singles are voter entitlements and political parties implementing programs strictly for increasing number of votes.  How decisions for these benefits are arrived at are, indeed, a puzzlement as the premises behind these benefits would never work at a business budget level or a family budget level.

Problems with government budgets and formulas include:

    1. Redistributing monies so that benefits are given to one group (families with children) while another group(singles) is forced to pay for them.
    2. No continuity of benefits from one year to another or from one political party to another.  Benefits may be implemented in one year only to be eliminated in the following year.  Over the years, this may result in one group receiving some benefits, while other groups are never able to receive any of the benefits because of the many changes over the years.
    3. There often appears to be no financial expert consultation on the financial impact or efficacy of the implemented benefits.  An example is the ability of family units with children to receive benefits even though they may be quite wealthy and  not working. The reason for this is that programs have been implemented without taking into account the net worth and assets of the groups receiving the benefits.  As a result of the benefits, these groups may become even wealthier.
    4. Financial formulas are created in isolation (federal separate from provincial).  This creates scenarios where benefits upon benefits upon benefits are doled out allowing some groups to achieve considerable incomes levels that they did not have before receiving the benefits.
    5. There appears to be no financial accountability to ensure financial fairness for all citizens.

If businesses or families and  individuals operated their budgets in this manner where the money cannot be followed, they probably would be considered by financial analysts to be poorly run, face audits from the Canada Revenue Agency and possibly even become bankrupt.

CONCLUSION

So, again the question must be asked:  What is the point of politics and politicians when programs are implemented that defy the financial intelligence of basic math, budgeting and common sense financial principles resulting in financial discrimination of certain groups like singles?

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

IMPROPER DEFINITION OF SINGLE STATUS PROMOTES FINANCIAL DISCRIMINATION

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IMPROPER DEFINITION OF SINGLE STATUS PROMOTES FINANCIAL DISCRIMINATION

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

Several past posts have shown how families, politicians and governments discriminate against singles in financial formulas.

In discussion of these posts, it is amazing how married or coupled persons and those in power of managing financial formulas manage to twist the definition of the status of singles.  For example, when discussing the post showing how family tax credits are pushing singles into poverty (singles), several rebuttals were made that singles do receive financial benefits.

It has taken several instances of these rebuttals to bring the author of this blog to an ‘ah ha’ moment.  Families, politicians and governments will lump singles in one marital status category, that is ‘single’, instead of stating it is single parents and widowed persons who receive the most benefits.

Readers will note this blog may refer to singles as ‘ever’ (never married, no kids) singles and ‘early in life divorced’ singles.  The reason for doing so is because ever singles and early in life divorced singles are more likely to be at the bottom of the financial totem pole.  (Late in life divorced persons are more likely to have been able to accumulate financial power and wealth because they were able to do so as two people while married or coupled).

So, in order to further clarify in future posts, this author may refer to singles as ever singles, early in life divorced singles or single parents where necessary.  The definition in the heading of this blog has been updated to reflect this change.

For those singles trying to articulate (articulate)how singles are financially discriminated against, they will need to add this level of distinction of ‘single’ status versus ‘single parent’ status to their arsenal of debating skills.  (Heaven help us, when will all of this stupidity end where singles will be recognized as needing to included in financial formulas, even when they are not single parents or widowed persons?)

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

HISTORY OF FAMILY TAX CREDITS OVER DECADES ARE FINANCIALLY DISCRIMINATING TO SINGLES-Part 1 of 2

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HISTORY OF FAMILY TAX CREDITS OVER DECADES ARE FINANCIALLY DISCRIMINATING TO SINGLES-Part 1 of 2

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

This post was updated on August 3 and 9, 2016.

Child Benefits (also known as Baby Bonus) have been around for a long time.  While this, in as of itself, may or may not have produced substantial financial discrimination for singles, it is all the additional marital manna benefits given to married or coupled with and without children family units over the years that have continually increased the financial discrimination of singles.

Some of most money-enhancing benefits beginning in 1945 to present date are outlined below.

benefits over decades

The Family Allowance (currently called Canada Child Benefit) began in 1945 as Canada’s first universal welfare program.  Benefits were awarded without reference to the family’s income or assets – based on the idea that all Canadian children are worthy of public support.  Since the 1980s, however, such allowances have been increasingly targeted to low-and-middle-income families.  The Child Benefits program has gone through different variations over the years.  The amount is calculated each year based on family income and the number of children in the family under the age of 18.  Supplements are also available for handicapped children.  It is said that the incidence of child poverty in Canada is second highest among Western developed nations – second only to the USA. The Canada Child Benefit program is still based only on income, not assets and net worth.

The Registered Retirement Savings Plan (RRSP) was introduced in 1957 to encourage Canadians to provide for their own retirement.  They are intended to encourage private savings for retirement and thus contribute to the earnings-replacement objective. Money placed in RRSP account,, as well as investment earnings on the money are tax-deferred until withdrawn on retirement or earlier.  As well as RRSP account for individuals, there also can be a spousal RRSP which allows a higher earner, called a spousal contributor, to contributed to an RRSP in their spouse’s name (it is the spouse who is the account holder).  A spousal  RRSP is a means of splitting income in retirement and, therefore, possibly pay less tax.

Maternity and Parental Benefits began in 1971 and are a part of the Employment Insurance program.  Parents must have contributed to EI program.   The basic rate of these EI benefits is 55% of average insurable weekly earnings up to a maximum of yearly amount of $50,800.  EI maternity benefits can be paid for a maximum of 15 weeks and EI parental benefits can be paid for a maximum of 35 weeks.  Some companies offer ‘top-up’ programs with increased benefits in amount of pay and length of payment. (Added August 21, 2016)

Child Rearing Drop-Out Benefit (CDRO) began in 1983.  This benefit allows parent to increase Canada Pension Plan (CPP) benefit if he/she stayed at home to take of children under the age of seven.  The period of time parent stayed at home can be excluded from the calculation of the CPP benefit so that CPP benefit is increased. The CDRO can only be used for months when Family Allowance Payments were received or Canada Child Benefits are eligible and earnings were lower because work was either stopped or there were fewer worked hours. (Added August 21, 2016)

The Registered Education Savings Plan (RESP) began in 1998.   From 1998 (the first year the program started) to 2006 inclusive the annual contribution limit was $4,000 and lifetime contribution limit $42,000 (including any contributions made prior to 1998).  From 2007 to present there is no annual contribution limit and the lifetime contribution limit is $50,000 (including all contributions made prior to 1998).  Based on the amount of the RESP contributions and income level, the government may additionally contribute up to $7,200 per child as well as other grants.

Since 2007, Canadian spouses or common-law partners have been allowed to split the pension income one of the spouse receives between the two spouses.  This strategy allows the spouse who has the highest income to lower his tax payable by sharing up to 50 % of his pension income with his spouse.

The Tax Free Savings Account (TFSA) began in 2009.  The amount of $5,000 new contribution room (from after-tax income) was allowed for each year from 2009 to 2012. For the years 2012 and onwards, the amount is $5,500 per person. The maximum amounts for an individual for years 2009 to 2012 is $20,000 and for a couple in a married or coupled family unit it is $40,000.  From years 2013 to 2016, the maximum amounts for an individual are $22,000 and $44,000 for a married or coupled family unit.  For years 2009 to 2016, the maximum allowable amounts for an individual total $42,000 and for a married or coupled family unit comprised of two adults $84,000 (all tax free).

OAS is a federal social program designed to provide a very modest pension to low- and middle-income retirees.  In 2016 the OAS is $6,680 for single person and $13,760 for a couple. OAS clawback which began in 2011 does very little to clawback the income of wealthy persons.  The clawback of OAS benefits in 2016 starts with a net income per person of $72,809 (couple $145,618)  and completely eliminates OAS with income of $118,055 (couple $236,110).  The repayment calculation is based on the difference between personal income and the threshold amount for the year. The  repayment of OAS is 15 percent of that amount.  All OAS is clawed back if personal income is over $118,055.  According to Human Resource Development Canada, only about five percent of seniors receive reduced OAS pensions, and only two percent lose the entire amount.  This program benefits wealthy couples and widowers the most.  OAS clawback for couple only begins at net income of $145,618 thus allowing them to receive full OAS of $13,760 as a couple.  There are not many ever single seniors and early divorced in life seniors who could hope to achieve a net income of $72,809; however, for wealthy widowers this may be easier to achieve and they are the ones who complain about clawback.

Starting in January 2016, tax changes decreased income taxes (federal) for those making between $45,282 and $90,563 from 22 per cent to 20.5 per cent. It also increased taxes on those making above $200,000 from 29 per cent to 33 per cent.  The majority of ever singles and early divorced persons do not have incomes over $45,282 (statcan).  While middle class families with children get less of the Canada Child Benefits because they are based on income, this is offset with reduced income taxes.  So, who financially loses out yet again?-answer, singles.  (This paragraph was added on August 9, 2016).

Income splitting would have allowed couples with children younger than 18 to transfer up to $50,000 in income from the higher earner to the lower earner for tax purposes, for a benefit that will be capped at $2,000. It was to start with the 2014 tax year, but was eliminated by the Liberal government.

Other possible benefits on the federal level are too numerous to mention.  Married or coupled with children family units may also receive other top up benefits on the provincial level.

From the time a married or coupled with children family unit begins at marriage until death of one of the spouses, it is possible they will receive shower, wedding and baby gifts, maternity/paternity leaves, child benefits, TFSA benefits times two, RRSP benefits times two, reduced taxes, pension-splitting, and possible survivor pension benefits.  There also are probably a great number of years where they never pay full taxes while increasing their wealth.  Singles are not able to achieve these same level of benefits and tax relief.

SOLUTION

To bring some sort of sanity to all the benefits upon benefits upon benefits that married or coupled family units receive, for starters it would be prudent for politicians and government to apply square root equivalence scales (finances) to any and all benefits, past and future.  An example when implementing benefits would be to apply a square root equivalence value of 1.0 for a single person family unit and a value of 1.4 for a married or coupled without children family unit.

CONCLUSION

As shown above benefits have been given to married or coupled persons with children family units for seventy five years and have not been as kind to singles.  The majority of the benefits have been implemented by the Federal Conservative party in the last decade and continue to be perpetuated by the Liberal party.  Ever singles and early divorced singles without children have not received the same level of benefits (single parents with children do receive some benefits, but these still are not at the same level as married or coupled family units, for example, pension splitting and spousal RRSPs).  There is no issue with providing support to poor and low income family units with children. However, singles should take great issue with benefits being given to family units with children without taking into consideration income as well as net worth and assets so that they can increase their wealth from these benefits.  Also, there should be great issue with poor and low income singles not receiving same level of assistance.

As stated in a previous post (decades), how many more decades is it going to take before singles are equally included in financial formulas as married or coupled family units? When is the financial discrimination of singles going to end?  This is not just a Canadian problem, but a worldwide problem.  Singles need to speak out about financial discrimination.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

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SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

In last post of July 25, 2016 (program) it was shown how the new Canada Child Benefit program is a source of discontent for families and how financial discrimination of singles continues.

This post also showed how singles feel they have been left out of the financial process and how most families will bash singles whenever they express despair about this fact. (Ever singles and early divorced singles without children are made to help pay for Canada Child Benefit while families with high net worth are still able to profit from the Child Benefit and other benefits).

As has been stated many times by this blog author, families will talk about about how their ‘hearts are eternally and inexplicably changed’ when bearing their children, but same hearts appear to become ‘hearts of stone’ in financial matters when these same children become adult singles, low income or no income persons and families.  These disadvantaged persons are tossed out or are made to be less important in financial formulas and decision-making processes.  It is like families become financially dissociated or detached from their children, siblings and relatives that are single without children. Singles are made invisible and excluded from financial formulas by families, politicians and governments.

In last post comments from singles on the Canada Child Benefit were itemized.  The one common theme running through all these comments is the dissatisfaction with financial discrimination, but no articulation of what needs to change.  When singles are commenting online or by other means, comments without substantiation will just produce more financial bashing of singles.

SINGLES NEED TO LEARN HOW TO ARTICULATE HOW THEY ARE BEING FINANCIALLY DISCRIMINATED AGAINST BY:

–Educate, educate, educate while stating facts– It is a sad fact that most families, businesses, financial gurus, politicians and government  will not have a clue about what singles are talking about when it comes to financial discrimination.  Most will get that glazed look in their eyes and state it costs less for singles to live and children are more important. And unfortunately, the education of others will have to occur over and over again until there is maybe one fact that will stick to achieve an ‘ah, ha’ moment.  Also, singles will need to be prepared for anger, defensiveness and a whole range of other negative emotions from people they are trying to educate.

–Show examples – This cannot be stressed enough.  It is often the examples that will produce understanding of the financial discrimination of singles.  For example:

— show copy of ‘Six Reasons Why Married or Coupled Persons Able to Achieve More Financial Power (Wealth) than Single Persons’ (six-reasons)

—show an outline of your budget

—give copies of articles that show how much it costs singles to live

— show examples of how financially privileged families are becoming with benefits like the Child Benefit program (tax-credits)

— show examples of how financially privileged families have become with the benefits upon benefits they receive.  (An example of benefits upon benefits is this statement:  From time couple with children is married to time one spouse dies couple will have possibly received shower, wedding, baby gifts, paid maternity/paternity leave, child benefits, TFSA/RRSP benefits times two, RESP grants, reduced taxes, pension-splitting and possible survivor death benefits. Singles get none of these benefits while supporting families through payment of taxes to support these benefits-show this statement when talking about financial privilege of families).

— show visual examples of graphs, pictures, etc. that give information on all the benefits that one family unit will receive over the family unit comprised of single persons, for example, financial silos (financial-illiteracy)

— show statistics from studies like ‘Living wage for Guelph and Wellington 2013 (Report) that itemize what it costs a single person to stay off the streets.

—become knowledgeable about different levels of status of singles (marital status).  For example, rebuttals will often state singles are included in financial formulas, when in fact, the only singles more likely to be included are single parents and widowed persons. (Updated August 7, 2016)

– Provide solutions – Provide solutions to financial decision makers, one example is to use cost of living equivalence standards (singles) for financial formulas.  It is a false statement to say that cost of living for a single person is one half of a married or coupled family unit of two. Rather, some statistics show cost of living for family unit of a single person is approximately 70% of a married or coupled family unit of two.  Singles deserve equal representation in financial formulas according to what it costs them to live.

– Spread the word – Tell other singles about financial discrimination, and above all, lobby all decision makers (families, businesses, politicians and government) about inclusion of singles in financial formulas.

– Get out and vote!  All financial lives matter.  Stop the financial discrimination of singles!

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

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CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice). 

(boutique-tax-credits-pushing-singles-into-poverty)

From CBC News-”New Canada Child Benefit program payments” July 20, 2016 (cbc) – Analysis of new Liberal Canada Child Benefit program and old Conservative UCCB program

The old Universal Child Care Benefit or UCCB (Conservative) provided $160 per child per month for children under six and $60 per month for children aged six to 17. That money was paid out to families regardless of income level.  The Conservative philosophy was that there should be some component of assistance for families that was universal.  However, this benefit was to be included as income and required payment of taxes.

Conservative universal approach could be viewed as all families should receive some component of assistance.  Just because they make a lot of money they should not be penalized, they should not be losing out and not getting any government benefits,  (Note: only for families, ever singles don’t matter).

The new Liberal program Canada Child Benefit (CCB) begins this month and combines the CCTB and UCCB into one payment that is entirely income tested up to $190,000 of income. The new payment is also tax-free making it more expensive than the UCCB.   Less than $30,000 in net annual household income generates benefit $6,500 for each child under six and $5,400 for children aged six through 17 tax free. 300,000 fewer children would live in poverty in 2016-17 compared with 2014-15.  The Liberals also reduced the tax rate from 22.5 per cent to 20 per cent for middle-class Canadians earning between $44,700 and $89,401 a year.  The Liberal (Trudeau) approach is that these benefits should be based on income testing.  Wealthier families can carry more of the load…they don’t need additional government handouts.

Since provinces also provide some child benefits, there was concern that provinces would clawback CCB from children on social assistance.  So far eight provinces has indicated they will not clawback CCB.

Illustration provided shows Ava Williams as a Toronto social worker with a net income of about $30,000, who lives in community housing. As a single mother of four children between the ages of six and 17, she says the new program will boost her old annual federal benefit payment by about $6,000 per year with added benefit of the new payment being tax free.  Something does not add up for the totals given..  One wonders if she means an additional $6,000 to what she received in 2015.  Assuming her net income is under $30,000 and her children all under the age of 18, it appears she will receive somewhere between $21,000 and $26,000 in child benefits, for a total net income between $51,000 and $56,000 all tax free.  This is in additional to subsidized housing and other possible federal and provincial benefits such as GST/HST credits with no clawback of the benefits..

An example of additional benefits received on a provincial basis with no clawback is Alberta.  In Alberta the non taxable child benefits are applied to working families with children under 18 and a net income starting at $25,500 with phasing out up to less than $41,220 per year.  Total annual maximum benefits for one child could be up $1,863, two children $3,107, three children $4,073, and four children $4,762.  Ava if she lived in Alberta with four children could receive total tax free federal and provincial child benefits of approximately $55,762 plus subsidized housing ($30,000 net income $21,000 CCB and $4,762 Alberta child credits). (There is no clarification on her marital status, which should not matter, but many readers wanted to know where the father was).

SYNOPSIS OF APPROXIMATELY 2500 READER COMMENTS FROM TWO NEWS ARTICLES

Approximately 2500 reader comments from two news articles were reviewed.(not number of readers, as some some readers comment many times)  The majority of comments were classified into the following major categories:

-Negative comments (most were negative)

-Not happy with amounts received between new Liberal and old Conservative benefits or  it is not enough

-Positive comments (very few)

-Bashing of political parties (Liberals versus Conservatives)

-Worried about future debt generated by benefits

-Many comments bashing Ava and where is the father of these children

-Other programs would be more beneficial than the child benefit program

-Program will be abused

-Benefits given for children but seniors and disabled receive much less

-Singles feel they have been left out of process and families of all types bash singles

-Divorce and death of one parent as well as other causes have impact on poverty

-Child benefits not only on federal level, but also provincial level

-In addition to benefits, should also be teaching budgeting and financial responsibility

-Immigrants

-Education

-Advantages of Child Benefits

-Benefit programs – have lots of other programs in addition to child benefit

-Eighteen years a long time for benefits

-Misconceptions about what is benefit versus welfare

-In addition to benefits, income taxes also cut for middle class

-Net worth and assets

Because of the length of the post, only issues regarding ‘Singles’ and ‘Net Worth and Assets’ will be discussed here.  Other categories will appear at the end of the post for those who wish to review all other categories in their entirety.

Reader comments regarding SINGLES

Single response-We’re sending cheques to families with household incomes up to $190,000/year yet there’s nothing for the 30% of single female seniors living in poverty. There’s a number of programs for single female seniors. I’m sure though that you and I would agree that it’s not enough.

Reader response-For all you single people out there, if you want to get tax free money , you better get married and start having kids because that is the only way you will get a tax shelter.

Single response – Nobody ever wants to help single people with no kids. Ever occur to you that I have no kids because I am responsible and do not want to bring kids into a life of poverty?

Reader response –  According to the left if you are single and no kids you need no help. You are well off and should pay more taxes.

Reader response -or you are selfish and don’t want to spend money on anyone but yourself.

Reader response – Don’t worry, that ‘right person’ is out there somewhere.

Reader Response -Yet other people’s kids will be the ones to take care of you when you are elderly. Don’t you think that’s worth a little bit of investment?

Single response – If the govt had money to throw away they could have reduced the tax rate for all of us, not just those who think they are poor because they gave birth to 4 kids.. Single people get NOTHING, just pay up more.

Reader response – We don’t have another human depending on us for life and those who have taken that responsibility deserve the help managing the full time obligation.

Reader response – I doubt that that is what he meant at all. A sense of responsibility is not selfishness.  Having kids is one of the most important things you’ll ever do. Granted, you cannot anticipate every life outcome, but generally speaking a responsible adult has an idea of their finances, and where they expect their finances to be in future. Most adults can actually budget their grocery store purchases – I believe they can budget the price of a child.   And having babies is not a right. Nobody should be under any obligation to financially support a stranger’s kids.

Reader response – You should be asking yourself why you need help if you’re single with no kids.

Reader response -And second, it’s not to say that single people with no kids can’t or shouldn’t receive support, it’s just that why would you need support for being single or having no kids? If you’re also elderly, or disabled, sick or unemployed sure, but being single and having no kids isn’t making it harder for us to live reasonably.

Single response – Hey, maybe all the poor single people – the disabled, etc., will simply die off and make room for all the government-supported kids.

Single response – as a childless middle aged man I am sick of paying for everybody’s kids, especially the Harper garbage boutique tax credits for hockey and ballet school.

Reader response – More likely you don’t get along with women very well or can’t find someone that will have your kid. Ever occur to you that poor kids may not necessarily have been born that way and that layoffs and economical hits create poor kids? That divorce also creates poor kids. Death of a spouse creates poor kids. You can be a millionaire and bring kids into the world and then have your investments tank the next day and you’re poor.

Reader response – If you are single your costs are much, much lower than if you have kids. Your contribution to the economy is also lower. When I go out to dinner my contribution is 5 times what a single person will bring to a restaurant but I still only need one table. This creates jobs as well. My kids go to swimming lessons (jobs and economic boost), they take the bus (jobs and economic boost), eat food and wear clothes and you name it. Grow up.

Reader Response – Single people do not pay more in taxes, that is a lie.

Single response – they certainly don’t get all the freebies (singles)

Reader response – I don’t think it’s that single people with no kids expect support, it’s simply that they perhaps don’t understand why people with kids should get rewarded with their tax money for having babies.

Reader response– Everyone at some point has paid taxes, not just single people. To say that only “single” taxpayers are funding tax benefit programs is hogwash.

Single response–Single and no kids myself, in my early 50s, barely able to keep a roof over my head even with a full-time job and living frugally. Where’s *my* handout/monthly allowance from the gov’t?

ANALYSIS OF COMMENTS REGARDING SINGLES

It is clear that families with children (and even some singles) are financially illiterate and have no understanding of what it costs a single person to live.  Living Wage for Guelph and Wellington (2013 living wage of $15.95 per hour), a bare bones program to get low income and working poor families and singles off the street, allows a calculated living wage income for single person of $25,099 with no vehicle, food $279, transit and taxi $221 (includes one meal eating out per month).  (In 2015, the living wage for Guelph and Wellington has been set at $16.50 per hour). Note, this is not Vancouver, Toronto or Calgary where living costs are much higher.

–Singles get no benefits except in abject poverty.  In both Liberal and Conservative programs, families with children (including single parents) get the benefits while ever singles and divorced persons without children get nothing.

–Singles pay more.  Yes, ‘singles pay more taxes’ is a false statement.  Truth is that singles, person to person, pay same taxes, but get less benefits.  From the time they are married until one spouse is deceased, married or coupled families with children will likely have received shower, wedding, baby gifts, possibly maternity/paternity leave benefits, child benefits times number of children, TFSA benefits times two, reduced taxes, pension-splitting,  possible survivor pension benefits, and then want to retire before age 65.  In certain cases some of these families will not have paid a full year of taxes.  Single parents will receive child benefits and possible other benefits as well.  When all the benefits that families with children receive are taken into consideration, ever singles and early divorced persons with no children do pay more.

-There is a the perception by families that a reason to have children is that they will take care of future generations.  Financial responsibility implies that everyone including families should be financially paying for and taking care of themselves.  Future generations do not deserve to have heavy tax burdens placed on them to finance this generation and future generations of parents and children.  Likewise, financial responsibility implies that children do not deserve huge inheritances, while singles have a much more difficult time achieving same standard of living and saving for retirement as families with children.

Reader Comments regarding NET WORTH AND ASSETS

Comment-Liberals are so dumb that they don’t even know that the measure of true wealth is NOT income but net worth.  Are they so stupid to think that a lot of your neighbors, who declare zero income (and I know a lot of them) but can afford Jaguars and Bentleys and multi-million dollar homes really are poor? My wife and I are middle class folks, who live in a modest townhouse in Vancouver who won’t qualify for this now because we “make” too much. Sorry, Justin Trudeau, but 150k a year in Vancouver won’t get you very far.

Comment-if you only make $30,000.00 a year, maybe stop after the second child. Kids are expensive.  “According to MoneySense.ca, the average cost of raising a child to age 18 is a whopping $243,660. Break down that number, and that’s $12,825 per child, per year — or $1,070 per month. And that’s before you send them off to university.”

Comment – Take my numbers for example:   Property tax in Oakville Ontario is very high. I live in a 3000 sq/ft house on a tiny 90×90 lot and property tax is $12,000 a year.  Food cost for a family of 3 is about $15,000 a year, Utilities is $9000, Gas/Car/Insurance (2 cars) is $13000, Clothing/Phone/Living Expenses $8000.  I am only listing off the big expenses. Not including a lot of the little things. That comes to $57,000 a year. Hardly enough to live.

Reader Response to above-That sounds more like someone living beyond their means. And taxpayers are expected to step in and assist families like yours who have a more luxurious lifestyle than most could even dream of.   If you mean 3 kids, maybe, but 3 people, well, then you want too much. A family of 3 in a 3,000 sq. ft house? $300 in groceries a week for for 3 people? Did you know your taxes would be that high before you bought the house? If so, then you brought that on yourself.

ANALYSIS OF COMMENT REGARDING NET WORTH AND ASSETS

-Sense of entitlement.  It is absurd how the wealthy and rich families believe they are entitled to everything (3,000 square foot house)..

-Net worth and Assets.   None of these benefit plans include elimination with high net worth and assets, so again, the wealthy and rich families are receiving benefits they do not deserve.  One of our last posts (see link at top of page) showed how families with considerable assets ($500,000), one spouse working and four children under age of six would receive considerable benefits while never paying a full year of tax if they retired at the age of 60 when their youngest child turned 18.

-Middle-class families with higher income levels for child benefit program complain they don’t receive same level of benefits.  Yet they refuse to acknowledge that they are the ones who would also receive the reduced tax rate from 22.5 per cent to 20 per cent for middle-class Canadians earning between $44,700 and $89,401 a year.

CONCLUSION

It is completely obscene how governments and politicians can implement programs that do not look at net worth and assets.  Families units (including singles) with high net worth and assets and low (of any kind) income do not deserve to get child benefits and other wealth-creating benefits and programs.

It is also financially discriminatory when governments and politicians only include certain family units in their financial formulas.   In Canada, family units with children benefit most while ever singles and early divorced persons without children get nothing.  In the USA, Bernie Sanders has managed to accomplish some wonderful things for financial fairness.  However, even some of his accomplishments agreed to by Hillary Clinton again target only certain family units, that is those with children (free college/university for families with incomes $125,000 or less and paid parental family and medical leave).  Most politicians, whether right or left leaning, only talk about families, with most benefits given only to families.  Singles are never mentioned let alone included in financial discussions and formulas.  What if singles want to go to college/university to get a better wage?  Why are they are not included?

Many of the reader comments correctly identify divorce and death of a spouse as having a big financial  impact on family units.  However, it is also irresponsible for family units to not have life insurance to cover these life circumstances.  Life insurance for spousal death should be mandatory, just like car and house insurance,  and should be ample enough to cover big ticket items like mortgages.  Maybe divorce insurance should also be implemented and made compulsory so that ever singles are not forced to support divorced family units.

For many years there have been great universal government programs in place like public school education, and health care.  For financial fairness, absurd programs like the child benefit programs need to be replaced with universal day care, government paid for college and university education (at least first couple of years of university) and affordable housing (should be available to all types of family units).Then, if wealthy families want to send their privileged children to elite private schools, day care and university, they can spend their own money to do so.

Benefit programs like income splitting and pension splitting under Conservatives are bad policy as they discriminate against singles, and the  widowed and divorced (and spouses earning equal incomes).   Benefit programs should focus on the poor with inclusion of net worth and asset assessments  in the financial formulas.

Governments, politicians, and families need to become financially educated on what it costs ever singles and early divorced persons without children to live.  All Canadian citizens deserve equal financial dignity and respect regardless of the type of family unit they are in.

Once children become ever single and early divorced without children adults, they should not become invisible and made to feel like they are no longer financially important to society.  All lives matter including ever singles and early divorced without children adults.

Additional Reader Comments:  click on link below:

CANADACHILDBENEFITSCOMMENTS2 (1)

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

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THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

Ivanka Trump in her speech yesterday at the Republican Convention stated that something needs to be done about single women without children being paid more than married women with children.

Some studies also show that women under the age of thirty make more than men and some studies show that employers don’t want to hire married women with children.

There also has been a lot said about women being paid less than men for the same job, married men being paid more than single men.  There is no doubt that there should equal pay for equal work.

Three different sources are outlined below showing the controversy generated by the facts and whether the fact are really true.

From “Workplace Salaries:  At Last, Women on top”, Time magazine, September 1, 2010 (time):

There has been recent evidence in the USA in many of the largest cities that the median income salaries of young women are 8% higher (and in some cases even higher) than men in their peer group.  However, this gap does not apply to rural areas and disappears for older women, married women and women with children.

However, there also are many factors where perception is false because all the facts have not been taken into consideration.  Some of these facts are:

  • Education.  Women are outpacing men in obtaining degrees.
  • Knowledge-based industries.  Larger cities which tend to have knowledge-based industries will have higher pay.  The decline of a manufacturing base in cities may result in lower wages.
  • Minorities.  Hispanic and black women are twice as likely to graduate from college as male peers.

“The holdout cities — those where the earnings of single, college-educated young women still lag men’s — tended to be built around industries that are heavily male-dominated, such as software development or military-technology contracting. In other words, Silicon Valley could also be called Gender Gap Gully.

As for the somewhat depressing caveat that the findings held true only for women who were childless and single: it’s not their marital status that puts the squeeze on their income. Rather, highly educated women tend to marry and have children later. Thus the women who earn the most in their 20s are usually single and childless”.

From “Fact Check:  Do young, childless women earn more than men?”, September 10, 2014 (abc)states:  data does not hold up because median figures don’t compare people who have the same jobs and qualifications.  They are an aggregate of the salaries of all people in a particular cohort; therefore, figures are misleading.

From “Childless Women in their twenties out-earn men.  So?”, Matthew Rouso, February 24, 2014, Forbes (forbes) :

“Statistics show only the average difference between men and women, across all jobs.  It doesn’t control for the types of job, the number of hours worked or for time taken off (to raise children, for example)….There are differences in job types, education levels, hours worked, and other factors that lead to these wage differentials.  But these factors are just as responsible for the overall difference in wages between men and women.  Once you control for factors such as college major, time off of the labor force to raise children, and hours worked per week, the gender wage gap essentially disappears.  A big part of the difference in pay is due to the choice of jobs:  women choose to enter career fields that pay less than those that men choose.   Women are still more like to be Kindergarten teachers while men are more likely to work in finance.  In short, firms aren’t discriminating against women. The reality remains that women, on average, do earn less than men.  But to blame it on discrimination is misguided.

Solutions to the gender wage gap aren’t simple.  Taking time off from a job, or working fewer hours, will reduce one’s earning potential, but many people (rightly) relish the opportunity to take time off to raise children.  There are no easy policy recommendations to deal with the loss of earning power for those who take time off to raise children.  But there is one thing we can do that would decrease the gender wage gap with no negative consequences: ensure that women are encouraged to pursue work in high-paying industries….Women may earn less than men, but causes are more complex than the cries of discrimination we hear from politicians.  When politicians mislead the public on this issue, the consequence is our delay in solving the real problem”.

Comment on Ivanka Trump’s statement:  It is difficult to find the source of her information.  Whatever the source is, what is more disturbing is the continuous reference by politicians and business people to marital status when human rights policies specifically state marital status should not be used in employment.  If Ivanka Trump wants to deal with married women’s pay, then she should address all other employment discrimination such as married men being paid more than single men.

TAX REFORM:  DONALD J. TRUMP FOR PRESIDENT (donaldjtrump)

Donald Trump as part of his bid for President platform has outlined his suggestion for tax reform.  A direct quote from his reform states:

“If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls…..All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.”

Comment of Donald Trump’s Tax Reform:  Here we go again, past posts have shown that cost of living is higher for a single person family unit than a married or coupled family unit without children.  This once again shows the financial illiteracy and ignorance regarding singles’ finances by politicians and business persons.  We do not know all the details of American tax system, but Trump cannot just give a figure for singles, and then multiply it by two for married or coupled family units.  Finances for singles don’t work that way.  The cost of living for a single person is higher than the cost of living for a family unit of two married or coupled persons, so why should married/coupled family units get the benefit of double tax free income?  Marriage penalty???  What about all the marriage benefits that married or coupled family units receive?  He also includes a separate column for head of household in his four tax brackets.  There is no explanation of what head of household includes, so it is difficult to know what this tax group is all about.

Financial discrimination will continue if singles figures are just multiplied by two to arrive at married family unit figures.  When, when are politicians and businessmen going to drop the marital status designation and use family units as the designated standard? Why can’t tax reform be more progressive instead of using same old financially discriminatory practices?

Cost of living equivalence scales such as the square root equivalence scale show that if a value of ‘1’ is used for a single person family unit, then the value of ‘1.4’ is applied to two adults, ‘1.7’ is used for two adults one child, ‘2.0’ is used for two adults two children and ‘2.2’ is used for two adults three children.

CONCLUSION

It is pathetic that marital status continues to be used a standard for tax, hiring and income policies when this is a direct violation of human right and civil rights.  It is absurd how married or coupled family units (including the Trumps) continue to protect their own interests without including all family members in financial formulas and favouring married family units over single person family units.

Ivanka Trump says married women are being paid less than single woman.  If one considers that most of management and business persons who do the hiring and determine the income schedules are married, then married people are the ones guilty of committing the wrongful acts against themselves, so don’t go blaming singles for this! There are many who do not like unions, but at least they pay the same wage for the same work without inclusion of marital and sex status.

Married and coupled women with children want it all.  They want employment time off for their children and then want full compensation even for the years they haven’t been working. If married women take time off to be with their children, they are not going to have the same level of work experience as a single person who has continuously been employed. When are married and coupled women ever going to realize that they can’t have it all while taking singles down to a standard of living that is lower than theirs?

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

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REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

(lost-dollar-value-list-to-date-and-financial-discrimination-of-singles)

Previous blog post on March 10, 2016 (programs) described how rewards programs generally discriminate against singles and poor families. The example used was Sobeys/Safeway. The discrimination of these programs continues.  This post describes another example involving Sobeys/Safeway.

The Sobeys/Safeway flyer from July 15 to 21, 2016 provides three items that are obtusely financially insensitive and discriminatory against singles and the poor.

One item was Breyer’s Classic Ice Cream where purchaser had to buy four 1.66 litre ice creams to get 50 bonus air miles.  The second item was 6 roll Sponge Towels where purchaser had to buy two to get 50 bonus air miles.  The third item was Lucerne Milk where purchaser had to buy two 4 litre jugs of milk to get 30 bonus air miles.

Just what are single persons or poor families with limited budgets supposed to do with two big jugs of milk that have short expiry dates?  Just what are singles supposed to do with four 1.66 litres of ice cream when they have limited storage space in their tiny freezer compartments?  At least the sponge towels don’t have an expiry date or a short shelf life.

Purchase of all three items would give 130 bonus air miles which is equivalent to almost $13 of free groceries.

It is socially, morally, ethically reprehensible and irresponsible for businesses that deal with one of the necessities of life (food) in Maslow’s hierarchy of needs to be only concerned about what “the market can bear” and “food sales are based on volume”.  It is reprehensible and irresponsible to give the ability for one family unit, especially the middle class and wealthy, to benefit over others.

There already has been a comment online about this issue and the writer has given Sobeys one star out of five.  Sobeys has made headlines about how difficult the amalgamation with Safeway has been.   Financial and amalgamation problems should not cause businesses to put in ridiculous and discriminatory programs that give a greater financial advantage to the rich and wealthy family units.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).