Poor Accounting

RECENTLY, the U.S. Census Bureau released its latest estimate of poverty in the United States, indicating that 14.5 per cent of the U.S. population, some 37 million people, lived in poverty in 1992. In the years such data have been kept, the poverty rate has been as high as 22.4 per cent in 1959 and as low as 11.1 per cent in 1973. Since 1980, the poverty rate has hovered around 14 per cent, moving only slightly in either direction.

Looking at such data, it is easy to conclude that we as a nation are not doing much, if anything, about poverty. In truth, we are doing a great deal, but by definition virtually all of our efforts are excluded from the data. This is because poverty is measured exclusively on the basis of pre-tax money income, excluding capital gains. (Members of the Forbes 400 could technically qualify as poor if they chose to draw 100 per cent of their income in the form of capital gains or simply borrowed against assets rather than draw a salary or receive interest or dividends.)

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Bruce Bartlett

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RECENTLY, the U.S. Census Bureau released its latest estimate of poverty in the United States, indicating that 14.5 per cent of the U.S. population, some 37 million people, lived in poverty in 1992. In the years such data have been kept, the poverty rate has been as high as 22.4 per cent in 1959 and as low as 11.1 per cent in 1973. Since 1980, the poverty rate has hovered around 14 per cent, moving only slightly in either direction.

Looking at such data, it is easy to conclude that we as a nation are not doing much, if anything, about poverty. In truth, we are doing a great deal, but by definition virtually all of our efforts are excluded from the data. This is because poverty is measured exclusively on the basis of pre-tax money income, excluding capital gains. (Members of the Forbes 400 could technically qualify as poor if they chose to draw 100 per cent of their income in the form of capital gains or simply borrowed against assets rather than draw a salary or receive interest or dividends.)