Tuesday, October 28, 2008

Jim the mechanic

We've all heard people say that we can't give tax credits to people who haven't "earned" them. We've heard that doing so will take away the incentive to "work hard" to achieve the "American Dream". Everyone knows about Joe the plumber, the guy who is reluctant to purchase a business because under Obama's economic plan, he would have to pay higher taxes on his projected $250,000 annual profit.

But have you heard of Jim the mechanic? No? Let me tell you a little about him. He has a wife and four kids. Jim has been a mechanic for 20 years, straight out of high school. Of course, "wrenching" was easier for him back then and he didn't have a family to support. It's a physically exhausting and mentally challenging job. He's getting older and starting to feel it. His hip hurts every single day and he's developing a limp from standing and laying on concrete all day. Jim leaves for work every day at 7 am and comes home at 7pm, just in time to read his kids a story and tuck them into bed. He doesn't want to work this hard, he has to. He has no other choice, believe me he has tried to find another profession but where else can he make $50k a year without a college education? But, how will he do this when he's 50? 60?

Jim's wife stays at home to take care of their children. It's a priority to them that they are the ones raising their children not a stranger in a day care. Besides, after paying for day care, gas, and all the other expenses that go along with working outside the home her paycheck wouldn't amount to much. She goes to college full time, taking online and evening classes. This will ensure that when she goes to work in a few years it won't be for $7 an hour. It's not easy juggling school and family especially because Jim is at work so many hours a day. But this is how it is and they both deal with it the best they can.

As I am sure that you know, $50,000 per year doesn't go very far when you have four children. Money is tight and they live paycheck to paycheck. Sometimes they have to use credit cards to pay bills or buy groceries. They rarely dine out and have few unnecessary expenses.

Fortunately, the state that they live in offers health insurance for children in lower middle class families. Their premium is $100 a year. (Thanks for spreading the wealth). Unfortunately, the state they live in does not offer insurance for adults in lower middle class families, so Jim's wife has no health insurance. Because of this she rarely goes to the doctor and often just tries to push any physical concerns she may have out of her mind.

Jim gets most of the income tax that he has paid throughout the year back after filing his taxes. This means that he is one of those people who pay little or no income tax. You know the ones haven't "earned" a tax credit. When they get that money back after filing taxes you would think that they could start a college fund, retirement fund, maybe even have a savings account with more than $100 in it. But, alas, Jim usually has to pay his property tax and over due bills with that money.

I think that Jim and his wife are working hard for what they have, a tax credit isn't their incentive, their family is. Tax credit or not, they are going to continue to do their best with what they have.

So, please don't expect Jim or his wife console you when you call them about your stock portfolio. They are too concerned with how they are going to buy groceries this week.

By the way, Joe the Plumber, paying taxes on $250,000 per year doesn't sound too bad to me.