Food Stamps
I started wondering whether it was wise for the government to offer food stamps to people forgoing normal full-time employment to pursue higher education. So below are some numbers crunched. This is simplified and some data is as old as 2006, but I think it gets the point across.
Average income by education: (2006)
Woman w/ bachelor’s: $45,410 Woman w/ master’s: $52440
If they are the head of household and only income the former would be in the (2009) 15% tax bracket and the latter 25%.
aside: That, sadly, means a $7030 income change produces a $6298.50 tax change for a net increase of only $731.50.
Therfore, the woman who continues working pays about $6811.50 in taxes. If, instead, she decides to complete a two year master’s program and has no income but relies on food stamps (2007), her family of three will max $9792 support. So, we could say she pays $-9792 in taxes those two years.
Then after those two years, holding a master’s, she pays $13,110 in taxes per year – making up her two years of support in less than one year. Of course, her uneducated doppelganger has been paying in those two years, so how long will the education actually result in more total taxes?
We have a system of equations on our hands:
y=6811.50x & y=13110(x-2) – 9792
The minus 2 in the parentheses is for the two years of not paying, and the -9792 is the government (tax-payer) support.
In six years from the start of her program, she will have surpassed the other’s tax contribution. Then, every year after she’ll give more than double.
I know this would not be every case, but these are averages. I think it becomes clear that supporting someone while they further their education is a good idea for the government, and they/we (since it is a government of the people) don’t have to wait very long to enjoy the benefits.
