child support guidelines

The Lazy Non-Poor People Below the “Poverty” Line Who Get Welfare, and the Hard-Working Poor Above it Who Get Taxed

by Hans Bader on September 13, 2011 · 6 comments

in Legal, Politics as Usual, Zeitgeist

There are plenty of people below the poverty line who aren’t really poor, and some people above the poverty line who are indeed quite poor. The poverty line is a very arbitrary measure seemingly designed to justify lots of spending on welfare and social services for “disadvantaged” people who aren’t really poor, spending that generates jobs for government employees (and government-subsidized non-profits) who provide welfare and handouts.

Robert Rector of the Heritage Foundation explains how many people below the poverty line aren’t really poor at all:

There is a wide chasm between the public’s concept of poverty and “poverty” as it is defined by the Census Bureau. The public generally thinks of poverty as . . . homelessness, or malnutrition and chronic hunger. In reality, the vast majority of those identified as poor by the annual census report did not experience significant material deprivation.

In a recent Rasmussen poll, adults agreed (by a ratio of six to one) that “a family that is adequately fed and living in a house or apartment that is in good repair” is not poor. By that simple test, about 80 percent of the Census Bureau’s “poor” people would not be considered poor by their fellow Americans.

In the same Rasmussen poll, however, 73 percent said poverty was a severe problem. Why the disconnect? The answer: Public perception of poverty in the U.S. is governed by the mainstream media, which invariably depicts the Census Bureau’s tens of millions of poor people as chronically hungry and malnourished, homeless or barely hanging on in overcrowded, dilapidated housing.

The strategy of the media is to take the least fortunate 3 percent or 4 percent of the poor and portray their condition as representative of most poor Americans. . .[But] they are far from typical among the poor. . . a poor child in American is far more likely to have a widescreen plasma television, cable or satellite TV, a computer and an Xbox or TiVo in his home than he is to be hungry. . .In 2009, the U.S. Department of Agriculture asked parents living in poverty this question: “In the last 12 months, were [your] children ever hungry but you just couldn’t afford more food?” Some 96 percent of poor parents responded “no”: Their children never had been hungry because of a lack of food resources at any time in the previous year. . . .

Here are more surprising facts about Americans defined as “poor” by the Census Bureau. . .

Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning. Fully 92 percent of poor households have a microwave; two-thirds have at least one DVD player and 70 percent have a VCR. Nearly 75 percent have a car or truck; 31 percent have two or more cars or trucks. . .Nearly two-thirds have cable or satellite television. Half have a personal computer; one in seven have two or more computers. More than half of poor families with children have a video game system such as Xbox or PlayStation. . . A third have a widescreen plasma or LCD TV. . .

At a single point in time, only one in 70 poor persons is homeless. The vast majority of the houses or apartments of the poor are in good repair; only 6 percent are over-crowded. The average poor American has more living space than the average non-poor individual living in Sweden, France, Germany or the United Kingdom. . .Forty-two percent of all poor households own their home; on average, it’s a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio. . . among the lowest-income fifth of households, inflation-adjusted consumer spending actually increased modestly during the recession.

Given these facts, how does the Census Bureau conclude that more than 40 million Americans are poor? They identify a family as poor the family’s cash income falls below specific thresholds. For example, in 2009 a family of four was “poor” if annual cash income fell below $21,954.

But in counting income, the Census Bureau ignores almost the entire welfare state. This year, government will spend over $900 billion on means-tested anti-poverty programs that provide cash, food, housing, medical care and targeted social services to poor and near-poor Americans. . .This means-tested welfare spending comes to around $9,000 for each poor or low-income American — virtually none of which is counted by census officials for purposes of calculating poverty or inequality.

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Maryland Legislators Seek to Jack Up Child Support Levels, Based on Bogus Inflation Rationale

by Hans Bader on January 28, 2010 · 5 comments

in Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony

A bill, SB 252, was just introduced in Maryland to increase child support obligations for households at most income levels–a massive increase of nearly 30 percent for a couple with one child making $3,400 a month!  Maryland residents, already burdened by recent state tax increases, now face additional burdens.

I don’t live in Maryland, and I’m not divorced, so I won’t be affected by the bill.  But as a lawyer who has studied most states’ child support guidelines, I find the economic ignorance behind the bill infuriating.

The bill is based on the bogus rationale that child support awards must go up, because inflation has increased child-rearing costs over the years.  But under Maryland’s existing child support guidelines, child support awards and obligations are based on income–the more you make, the more you pay!  So when incomes and prices rise due to inflation, so, too, do child support payments.  The guidelines thus contain a built-in inflation adjustment.

Yet some Maryland authorities apparently do not grasp basic economics, arguing that “today’s child support levels” are too low because they “are based on the economic realities of 1988, when a gallon of gas cost $1.08 and a first-class stamp was 22 cents.”

Wrong.  Child support levels are based on what payors earn now, not what they earned in 1988 – when incomes in dollars were much lower.  As Murray Steinberg, a former member of Virginia’s child-support review panel, noted, wages have gone up faster than inflation since 1988, meaning that child support levels have risen along with inflation, rather than being eroded by it.  (Steinberg cited publicly-available wage and inflation data from the Bureau of Labor Statistics proving this. See, e.g., Bureau of Labor Statistics, Employment Cost Index, Constant Dollar, June 1989=100 (April 29, 2005).) (Available at http://www.bls.gov/web/ecconst.pdf.  I used to work at the BLS producing federal labor cost and living cost data.)

The same false argument was unsuccessfully made in Virginia.  But its legislature wisely saw rejected it, and voted down a failed rewrite of Virginia’s guidelines based on this theory in 2006, rejecting a child support increase bill known as HB733.

Moreover, some child-rearing costs that rise the fastest with inflation – like “health insurance expenses” and “extraordinary medical expenses” – are awarded as statutory “add ons” on top of  the “basic child support” award, preventing their inflation from eroding the sufficiency of child support levels.  See Bureau of Labor Statistics, “Table 1A, Consumer Price Index for All Urban Consumers” (available at http://www.bls.gov/cpi/cpid04av.pdf) (medical inflation outstrips inflation in general). This offsets the fact that payments under the “basic child support obligation” schedule rise at a diminishing rate relative to income at the upper portions of the child support schedule.

Maryland’s guidelines are not inadequate.  They greatly exceed the true cost of raising children, and amount actually spent on raising children, for the vast majority of households making above $30,000 a year (and also for those households making less than $30,000 a year in which there are substantial court-ordered daycare payments awarded pursuant to Md. Code Section 12-204(g)).  Indeed, Maryland’s guidelines were historically above average for the nation, although that edge may have dissipated in recent years as some other states have jacked up their guidelines based on similar bogus inflation rationales.  (See, e.g., Ronald K. Henry, “Child Support At A Crossroads: When the Real World Intrudes Upon Academics and Advocates,” 33 Family Law Quarterly 235, 241 fn. 20 (1999) (lawyer notes that Maryland child support levels are above the national average, citing the example of a child support obligor with an income of $1000 per month).)

The bill would increase child support obligations so much that working-class fathers would end up paying more in child support than much wealthier families actually spend on their children.  I am a lawyer, and my wife is an accountant by occupation.  But we spend less on our daughter than the proposed child support guidelines would require many working-class non-custodial parents with much lower incomes to spend.  Households with a monthly income of $3400 have a higher “basic child support” obligation under the bill–not counting statutory add-ons–than I and my wife actually spend on our daughter, who has plenty of toys, games, food, and clothing.  (And that’s true even if our child-care costs are estimated at the maximum reasonable amount, such as by attributing to our daughter a per capita share of the amortized cost of our cars.)

(Ironically, the bill, while increasing child support payments at most income levels, would actually cut them for certain very low-income households, where child support payments actually come closest to matching child-rearing costs.  It increases the guidelines where they are most excessive now, and cuts them where they are least excessive.  “‘We’re reducing at the low end where it’s needed the most,‘ said Del. Benjamin F. Kramer.”  While I do not think that Maryland’s existing child support levels are too low even at the ”low end,” and would not object to a modest reduction there, it is odd to cut them only at the very low end while increasing child support awards everywhere else, even where existing awards grossly exceed the actual amounts actually spent on raising children by typical parents at that income level.)

State child support agencies like to boast of increased child support collections.  There are two ways for them to do that.  The easy way is to increase child support guidelines to jack up the payments imposed on law-abiding people who already pay their child support in full.  The hard way to do it is to make people who don’t pay what they owe now (many of whom are poor and have difficulty paying) finally pay up to support their children.  Maryland officials seem to have chosen the easy way out, at the expense of their citizens, and economic reality.

Previously, I wrote about a bill in Virginia, which will probably die, to sock divorced parents with discriminatory burdens.  Earlier, I discussed how divorce law increasingly harms veterans and small businesses, and the peculiar economics of divorce.

Irrational Massachusetts Child Support Guidelines

by Hans Bader on January 2, 2009 · 19 comments

in Legal, Personal Liberty

Massachusetts has long had some of the most excessive child support guidelines in the nation: for just one child, the father is ordered to pay close to 25% of his gross income, or more than 35% of his after-tax income, to the mother. This amount of money grossly exceeds the cost of raising a child, and there’s no obligation even to spend the money on the child, rather than the mother. As a result, the father often has a disposable income that is just a fraction of the income of the mother’s household.

But excessive as the guidelines are, the state courts are now promulgating a child-support schedule that radically increases the rates by 60 percent for middle-class households where the father and mother make similar amounts (like $40,000 each or $60,000 each). The guidelines are not rationally-related to the costs of rearing children.

The new guidelines are harmful to children, not just their fathers. Children spend up to a third of their time in their fathers’ care, yet Massachusetts’ child support guidelines financially destroy many divorced fathers, leaving them chronically broke and thus unable to provide their children a nice home to live in during visitation. The state child support guidelines give fathers little if any reduction in child support payments for the time and money they spend caring for their children during extensive visitation, even though such care reduces the child-care costs of the recipient mother and increases the father’s expenses.

This financial havoc can’t be justified by claiming that divorced fathers had it coming: most divorces in this country are no-fault divorces initiated by wives, rather than husbands (wives initiate about two-thirds of all divorces, according to data collected by the National Center for Health Statistics, and the many studies reviewed by Sanford Braver of Arizona State University in his 1998 book Divorced Dads: Shattering the Myths).

It is also frankly sexist: unlike nearby states, like Maine and Connecticut, where fathers have some realistic chance of getting primary or shared custody, in Massachusetts, trial judges tend to award primary custody to mothers over similarly-qualified fathers, even when the fathers are fit parents who have been very actively involved in the lives of their children. Everyone knows that these guidelines are intended to milk fathers to benefit their ex-wives (and their divorce lawyers). Prominent divorce lawyers like Richard Crouch have noted that in practice, child-support and spousal support laws are often applied in a sexist fashion.

As excessive as the child-support guidelines are, alimony is often awarded on top of it. Alimony is awarded in Massachusetts even to wives who have committed adultery or engaged in domestic violence. (Most states award alimony without regard to fault; a minority preclude alimony based on fault, such as adultery; and some states that generally ignore fault still forbid spouses who have perpetrated domestic violence to collect alimony. A few states, like California, even award alimony to low-income husbands, but in most states, courts are, in practice, much more willing to award alimony to wives (even those who are quite capable of supporting themselves) than to low-income husbands, even if the husband did something praiseworthy like working to pay his wife’s college bills).

I should note in closing that I am not divorced, have no child support obligations, and no personal or family history of entanglement with the family courts or divorce courts. My only connection to Massachusetts is spending three years earning a degree at Harvard Law School, and reading dozens of Massachusetts family-court cases. (Years ago, I also read the child support guidelines of virtually every state).