Photo above - the charming "Hancock" 1,600 SF mobile home. In the midwest this will set you back about $140,000 before site prep, permits, fees, water and sewer hookup. Land not included. If you need THAT, it will be a lot more. The total cost - if you're lucky might actually be under the 2.5X ratio of home cost to the average US income of $63,000. Not for a normal house, which now costs $420,000.
US incomes fall for third straight year as inflation rises (nypost.com)
Yeah . . . who DOESN'T love inflation? Finding out that everything on the mc-dollar menu now costs $2.50. Hyundais start at $30,000. And the average house price of $420,000 is 7 TIMES higher than the average income of $63,000. Government and bank lending guidelines say your house should be no more than 2 and half times your annual income. See link above for details on how and why your paycheck can't even keep pace with Starbucks' latte grande menu.
Okay . . . these things come in pairs – the second shoe drops: We might be getting SOME pay increases (unless you're a Fed-Ex driver, and you got boosted to $170,000 a year), but for most of us the pay not only doesn't keep up with the cost of living, it pushes us into higher federal (and state, and municipal) tax brackets. These tax rates are NOT indexed for inflation. If you got a 5% pay increase last year, the odds are good that you might be paying a higher tax rate on those earnings. Even though your paycheck doesn't cover the same expenses it did a year ago.
This is not some weird, freak statistical result applicable just to Bidenomics. The government NEVER indexes taxes to inflation. They WANT us to pay more on our stagnating wages. It's how politicians vacuum up more tax dollars to spend on all the stuff we don't want: 800 military bases around the world; 256 separate agencies to supervise public schools and teacher certification; 100,000 unused Ebola virus moon suits in storage since the Obama era; border walls that never got built and wouldn't have worked if they had been.
Okay . . . a few socialists in the back are getting fidgety. “I'm part of the 50% of Americans who pay ZERO in federal income tax”, they're cat-calling me. “So you're a lying bee-atch!”. To those deep thinkers I have one piece of advice – check out the history of Social Security withholding over the years.
Income taxes was first invented in the early 1900s (previous iterations were ruled unconstitutional until the 16th amendment was passed). If you earned $500,000 a year, your tax rate was . . . wait for it . . . 7%. But of course, $500,000 was worth a lot more back then. That would be $16 MILLION in 2023 dollars. And your tax rate would be 39%, plus state and local bites.
When the tax law first passed in 1913, everyone below $3,000 income paid zero. Starting at that level, you paid 1%. If you're good at math, you've already figured that $3,000 1913 dollars is about $100,000 today. One percent, let me repeat.
If taxes had been indexed for inflation, they'd be a lot lower today. In fact, the opposite happened, Over the years congresspersons made endless radio and TV speeches saying tax rates needed to go higher. Because the rich were too rich.
Today, congress has declared “rich” as about $200,000 for a single earner. Which, as it turns out, is just a little more than a senator's salary. If congress had declared themselves to be rich, all hell would have broken loose, no? So to provide further limbo room under this level, congress also awards itself travel perks, meal perks, fee parking, free banking at the congressionally operated bank, and who knows what else you can get by flashing your “Senator” badge in the checkout line.
In the meantime, the tax rates you and I pay keep going up, because inflation is pushing us into higher and higher tax brackets. So we spend less on ourselves (and our kids), and we depend more on federal student loans, section 8 housing vouchers, food stamps, and in some cases tent cities for the homeless, just to get by.
The US dollar is a joke. Only land, and precious metals (and some stocks) have managed to keep up with inflation. Taxes have gone through the roof – if you're lucky enough to have a roof, 90% of senators and congresspersons are reelected each year, if they choose to run again. Because we're poorly represented, and poorly informed.
An average earner can't buy an average home. Despite 30-year mortgages. Some banks are experimenting with 40 and 50 year terms. When you die and see me in heaven, please let me know how this turned out. I'm not signing up for anything like that.
I'm just sayin' . . .