Stuck in the Middle
I paid for my post-high school education with scholarships, part time work and student loans. I maintained full-time employment for forty-two years after graduation, during which I lived within my means. Together with my husband, we made decent savings and investment decisions that have allowed us to retire, not wealthy, but comfortable. Definitely middle class.
Yet we live with an ever-present specter – if either of us is struck by a major illness or if the stock market takes another major plunge (as it did in 2008) or if the housing market takes a dive, our remaining years could be suddenly, drastically changed for the worse. Still, because we are neither financially, physically nor mentally compromised, we are not considered part of any “vulnerable population.” We’re ineligible for most programs that provide low-cost assistance and support services for those aging in the community. If you’re like us, in the “iffy” middle class, you get little credit for what you are giving and no assistance for what you may need.
Like many people in our cohort (over 65, not in the labor force) we donate time, money, and expertise to local and national charities and community improvement groups. We give because we can and because its consistent with our values. According to the Bureau of Labor Statistics in 2015, over 11,000 people like us volunteered a median of 94 hours annually to organizations of all kinds. These hours were fairly equally distributed among men and women, no matter their marital status, educational attainment and whether or not they were parents. Ninety four hours per year of unpaid volunteer effort donated by persons with seasoned skills and deep life experience. The same people whose ability to take care of themselves is being whittled away by changes in tax codes and inflexible “eligibility” rules.
Let’s Give Credit Where Credit is Due
If you want to talk vouchers, let’s not replace public school system funding with private school vouchers. This only undermines the future stability of a democratic republic and abruptly reneges on the opportunity America has promised and delivered to its citizens for two centuries. Instead, let’s provide vouchers that reward middle class seniors (and middle class parents) for the time and expertise they’re voluntarily giving to society. In Asheville there’s been some consideration, for example, of seniors being able to earn credit for donated time and expertise, vouchers which could then be traded for transportation when needed. This is a great way for an “Age-Friendly Community” to show respect for what today’s seniors are contributing and add years of meaningful participation for them in the fabric of society.
Here are examples of cities already using transportation voucher programs. “As part of a Livable Communities initiative supported by the local Area Agency on Aging, Alliance for Aging, Coral Gables, Florida replicated a successful taxi-voucher program operating in Boston, Massachusetts. Area seniors were able to purchase $20 worth of vouchers for $10 and use them for the transportation needs important to them. The demonstration program helped seniors explore mobility options as alternatives to driving their automobiles.
The City of Olathe, Kansas sells booklets of vouchers at a 79 percent discount to eligible older adults and people with disabilities who can use the vouchers to pay for taxi services. The city has a negotiated rate with the taxis and reimburses them for the vouchers used. The program has some restrictions, including hours of operation and the amount used per month. This program has been in operation since 1977 and now also serves low income workers. Funding is provided by the local government and Job Access and Reverse Commute grants from the US Federal Transit Administration, Department of Transportation. Using taxi vouchers allows citizens of Olathe, Kansas to access rides when they need them.
Taxi companies often benefit from voucher programs as well. They gain more riders and often have contracts with voucher-administering agencies that guarantee them a number of trips per month.” (From the National Cntr. On Senior Transportation.)
We are The Missing Middle. I say, kudos for the kind of innovative thinking described above to help maintain the middle class, the healthy core of the American social experiment. I hope you agree.
Unfortunately, there are erosive forces showing nothing but disregard and disrespect for those not eligible for government assistance and not wealthy enough to survive the “Scrooge Squeeze”. Below is an example of how this disturbing trend is playing out in North Carolina.
A Tax Deduction and a Tax Credit Are Not the Same Thing
As explained in an article by SimplyTaxes LLC, December 2016, “In an attempt to simplify North Carolina tax law, many exemptions, deductions, and credits have been eliminated. The most notable eliminations are as follows:
- $50,000 exemption for small business owners (Many retirees start small businesses to make ends meet.)
- $4,000 deduction for government retirees (Bailey Settlement exclusions still apply)
- $2,000 deduction for non-government retirees
- $35,000 exemption for severance wages (This and the next two bullets impact middle class, middle age)
- Education expenses
- Child care expenses
- Earned Income Tax credit
- Adoption expense credit
- Long-term care insurance credit
To compensate for the loss of many deductions, the standard deductions that may be claimed on North Carolina tax returns increased as follows for 2016:
- From $6,000to $15,000 for married individuals filing jointly
- From $4,400to $12,000 for individuals filing using the Head of Household status
- From $3,000to $7,500 for individuals filing using the Single or Married Filing Separate status (if other spouse does not claim itemized deductions)”
Note the difference: “Expenses” which were deductible may continue to increase at the mercy of the market, while any future change in the “standard deduction” is at the discretion of the legislature. It may not be increased again for a long time or might even be reduced (no matter what’s happening to citizens – unless we can get those in power to listen and care).
Also, new rules are in play for people who opt to itemize deductions in lieu of taking the standard deduction. There is now a $20,000 maximum cap on the amount that can be claimed in total for mortgage interest and property taxes paid on real estate. This deduction was previously unlimited for most people in the past. (Not a great way to reward middle class elders who pay their mortgages and taxes on a timely basis and have much of their net worth in their homes.) And finally, contributions to North Carolina 529 college savings plans are no longer deductible. (Another attack on educational opportunity.)