Re:We should only work 25 hours a week, argues professor
by Mvandenbergh on Monday February 04, 2013 @09:27AM
(#5164188)
If that were the case then savings rates should have trended upwards over the last few decades as tax rates have come down in the US.
Re:We should only work 25 hours a week, argues professor
by InclinedPlane on Monday February 04, 2013 @06:07PM
(#5167864)
That change only applied to some.
Here's a graph of overall tax burden since 1960 broken down by income group: http://graphics8.nytimes.com/images/2012/04/13/opinion/sunda...
Only the top 1% has seen a dramatic change in tax burden over that time frame, for everyone else taxes have either stayed steady or gone up overall. The most important parts of this graph are the middle, second, and top quintiles, who should be the most capable of putting money aside. However, their federal tax burdens all rose substantially. And the recent reduction in tax rates has only occurred during a massive economic contraction so there hasn't been a true opportunity for most people to make use of the lower rates yet.
Today working around 40 hours a week is an important prerequisite for a great many important things such as the traditional suite of full-time employee benefits (health insurance, for example).
Additionally, social security and medicare taxes take 14% of income right off the top, and then federal and state income tax adds onto that. Such high tax burdens make it much more difficult for people to build up their own savings, and it's no surprise that savings rates have plummeted over the years. Lack of savings results in greater dependence on employers and less negotiating capability for non-traditional work hours.