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Pesky Brother-in-Law, Thanksgiving Edition

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Ah, Thanksgiving. Savory food, family... and that pesky relative with a PhD in Fox News that keeps needling you to the point where you can't even enjoy Cousin Chrissy's carrot soufflé. [All references are to actual dishes at my family table! Also, usual disclaimer and Thanksgiving tidings to my bros-in-law -- Jim, Clint, Sean, Andy, Tom. Earlier editions of this series are here and here.]

Well, don't fret, and definitely don't let them throw you off your eating game. Here's a handy roundup of retorts to a few egregious arguments you're likely to hear. Master these, and you'll probably end up having thirds of Aunt Debbie's pecan pie.

Bro-in-Law: Poor people aren't even poor in this country -- they've got tons of stuff -- TVs, air-conditioning, even houses!

Well, one thing's for sure -- they don't have a lot of money. You know what the poverty threshold is in this country? For a single mom with a couple of kids, it's around $17,500 a year. Imagine raising kids on that kind of income today (look to your mom for support). And according to the official numbers, 20 million people -- about 7% of the population -- live in families with income below half that amount -- I don't care if you own 10 TVs -- good luck patching a life together on that kind of income.

But you're right bro, a lot of poor people have TVs and ACs... less than half own homes, by the way, and many of them are cash-poor elderlies. But you've got a point, up to a point. Once you take into account their government benefits, like food stamps, Medicaid benefits, and tax addons to their wages, it's true that a lot of poor people are not living in anything like a state of privation.

In fact, the wage credit for low-income workers kept over five million people, including three million kids, out of poverty last year. So some of the stuff we're doing is helping and that's something we might want to be a little bit proud of. Sure, government gets some stuff wrong, but helping to top off low-wage incomes to help families trying to do the right thing is a great policy. By the way, bro, your hero Ronnie Reagan expanded that wage subsidy program (the Earned Income Tax Credit), calling it the best antipoverty program we've got. (Let me know how he deals with that one.)

And here's the thing. While a lot of poor families may be getting by, it's awfully tough for them to get ahead. There's less income mobility here than in most other advanced economies, and there's also less mobility than they're used to be. While prices of a lot of things like TVs, ACs, and laptops have fallen a lot, helping today's poor to consume a lot more cool stuff than yesterday's, some other very important prices have gone up a lot faster than average, like college, or like access to better neighborhoods with better schools. That's how kids get a chance in this country, and precious few kids in families living on $20K or less are getting those chances.

Even if they've got a few TVs.

Bro-in-Law: Well, by now you've gotta admit it -- Obama's failed. Time to get on the [Mitt, Newt, etc.] bandwagon and give somebody else a chance to clean up the mess because your guy can't do it.

Now wait a minute, bro. I mean let's just think about that for a minute. Your man W turned a phat budget surplus into a deficit and left Obama with an economy contracting at the nightmarish rate of 9% (that real GDP in Bush's last quarter in office -- 2008q4), shedding hundreds of thousands of jobs per month.

This President takes office, gets the Recovery Act into the system, and by the second half of 2009, GDP's growing again. But early 2010, the private sector's adding jobs, as it's been doing ever since -- too slow, I grant you -- but there's no question he turned things around.

And let's be real here... your pals up there in DC have blocked every idea he's tried to move. And some of them, like Mitch McConnell, say they're doing so in order to defeat him. Imagine that-this guy proudly announced he"ll throw the President's plans to help the economy under the bus if that's what it take for his own political gain. I don't care how ambitious you are, that's just despicable and I don't get it.

(Looking around for support of basic fair play, say... ) So I really don't think that's a fair judgment of this president and what he's accomplished. Even with vicious, aggressive forces working 24 and seven against him, he's done great stuff.

And I gotta tell ya, listening to those guys and gals who want to take his place, I'm pretty much hearing the very playbook that lost the game-big time-the last time out. It's like they drove the car into the ditch, fought the President every step of the way as he got it out, blocked him from jump starting it, and now they want the keys back!

(Help yourself to Aunt Judy's cranberry pie -- and take that extra scoop of vanilla -- you earned it!)

Bro-in-Law: I can't stand the way you liberals go on about the rich not paying their fair share. You know as well as I do that half the country doesn't even pay taxes!

OK... put down that turkey drumstick and give him your best incredulous look. Then start by appealing to common sense.

Why, that can't be right. I mean, every time you buy gas you're paying a tax, right? And everybody who works pays payroll taxes, don't they? Heads should start nodding.

The fact is, virtually everyone pays taxes. Your beloved bro is talking about federal income taxes and that's just one of many kinds of taxes people pay. For most Americans, it isn't even the largest tax they pay-more than four in five working Americans pay more in the payroll taxes than they do in income taxes.

Let that sink in while you take a spoonful of Bubbi's cranberry sauce. Then, add that unlike Federal income taxes which rise with your income level, payroll and sales taxes -- the kinds of taxes that low-income people pay tend to be regressive in that they extract a larger share of income from low-income families than from the wealthier households.

Same with state and local taxes -- property taxes, sales and excise taxes, additional income taxes -- they also tend to be more regressive.

In fact, poor families -- those in the bottom fifth of the income scale -- pay 16% of their meager income in taxes of one sort of another.

And if we're talking about the federal income tax, more than eight of every ten people who owed no federal income taxes fall into one of two categories: working people who paid substantial payroll taxes, and seniors living largely or entirely on fixed incomes. The rest? Largely students, people with disabilities, the long-term unemployed, and others with very low incomes. Oh yeah -- and a bunch of corps with kickass tax lawyers (and, to be fair, often large capital losses which they can deduct from their tax liability).

How I ask you, my brother, are you saying we should raise taxes on seniors who depend on Social Security, on disability and veterans benefits? Is that where you want to take this, given that something like 4,000 millionaires will pay no income tax this year? I mean, remember Warren Buffet talkin' about how he paid less taxes than his staff -- now there's something that doesn't seem right at all... (more heads nodding -- let's land this argument with style):

I gotta tell ya bro, I'm not worried about the Buffets of the world. I'm worried about the working single mom trying to make ends meet, the young adult in community college, the senior living on her Social Security, the security guard workin' his butt off for the minimum wage. And all of 'em are paying payroll and sales taxes.

Jeez, if anything, bro, I can't imagine how families like that are getting by. I guess we've got a lot to be thankful for today...

Nuff said.

This post originally appeared at Jared Bernstein's On The Economy blog.