This is my 100th “daily comment.” Part of the fun has been your feedback.

From one of you frustrated by the timbre of some of today’s youth . . .

“Suggest that your readers take their kids to the park for a ride on the swing this weekend. Need a financial angle? It’s free; will bring down their future healthcare costs by promoting exercise; will save tax dollars by keeping their otherwise attention-deprived kids from becoming park-equipment vandals; and saves the cost of renting some canned entertainment from Blockbuster. Man, this idea is full of money saving tips. Perhaps parents will be able to give up the 70-hour work weeks and spend some time with the kids for a change. And while we’re at it, maybe you can suggest that tax-deductible contributions be made to an organization that can benefit the youth of this country. Prevention is cheaper than incarceration. Perhaps you could encourage them to avoid capital gains taxes by donating appreciated stock to Big Brothers…I dunno, you’re the financial guy . . . think of something . . . society needs your help.”

I dunno either. But it sounds as if you’re on the right track.

“I read your comment on Earned Income Credit. The only problem I have with this credit is that of the two people I know who claimed it, both did so fraudulently. I know that fraud is going to occur one way or another, but my personal experience on this issue has been that fraud was involved 100% of the time. Seems to me like it’s only a good idea if the tax payers don’t bleed to death from unchecked fraud!”

Good point. I suppose if someone earns some money “on the books” and some off, or if one spouse gets a W2 and the other’s income is not reported, you’d have a double tax fraud: the fraud not reporting off-the-books income, as is already common today; plus the additional fraud of actually getting a government check you were not entitled to.

The purpose of the Earned Income Credit, of course, was to help low-income families. If someone with kids worked full-time and were still below the poverty level, the government would chip in a little more. This is a better scheme than lifting the minimum wage, it is argued, because it’s targeted. More than half the minimum-wage workers are not supporting a family, but in many cases are just teenagers flipping burgers to supplement the family income. Why force the marketplace (including poor people who eat at McDonald’s) to pay more to a kid whose dad might earn $60,000 a year?

So the Earned Income Credit is more targeted, but the minimum-wage is essentially fraud-proof (at least on the part of the worker). It looks as if we’ll have a combination of the two — a modest hike in the minimum wage and a continuation of the Earned Income Credit. And I say: good. To someone like me who makes considerably more than $8,500 a year (the current $4.25-an-hour minimum for 50 forty-hour work weeks), these two boosts, even in combination, seem anything but extreme.

As for its costing lots of jobs, I’m not sure I buy that. Most minimum-wage jobs are not in manufacturing, which can be shifted off-shore, but rather in service industries where the work has to be done here. Yes, raising the minimum wage will cause some employers to cut staff. But maybe not as much as they say, because with staff cuts come service cuts. People will complain — or patronize the restaurant where the service =wasn’t/= cut back. So perhaps instead of cutting jobs, employers will raise prices a nickel or a dime, which redistributes a tiny bit from “everyone” to the lowest-paid. “Everyone” can’t afford to buy quite so much, but the lowest-paid can afford to buy more. I have a hunch the lowest-paid may deserve it.

Monday: Sell Your Losers?


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