Tags: inflation | income | biden | rent | food | gas
OPINION

The Worst Rent and Food Inflation in 30 Years With 42% of Monthly Income Erased by Hidden Taxes

The Worst Rent and Food Inflation in 30 Years With 42% of Monthly Income Erased by Hidden Taxes
(Dreamstime)

George Mentz By Monday, 26 February 2024 09:00 AM EST Current | Bio | Archive

Americans are at war with a horrible economy. According to CNBC, about 12% of working families in the USA have serious life insecurity and can’t afford meals, rent, health care, a vacation, or credit card bills.  [i]

A this time, rent and food inflation has essentially destroyed the American Dream for most workers according to The New York Times, Harvard and the Government’s USDA. [ii] [iii] [iv]

Budgets and savings are a critical aspect of personal finance management. Understanding the proportion of income allocated to these essential needs is vital for financial stability and planning for the working family and the nation as a whole. This article exposes the bone-crushing inflation of rent and food costs and highlights the catastrophe that has fallen upon working families, union members, and minorities in all major cities in the USA.

The data also highlights some of the hidden taxes on the working families from real estate taxes, taxes on utilities and taxes on the internet.

For decades, financial experts often recommend that rent should ideally consume no more than 30% of one's monthly income, but American budgets are now effectively bankrupted by rates well over 30%. [v]

Rent vs. Long-Term Goals

Rent typically represents one of the most substantial expenses for individuals or families. The percentage of income allocated to rent varies widely depending on factors such as location, housing type, and personal preferences. In urban areas or regions with high demand for housing, rent tends to consume a larger portion of monthly income.

The proportion of income allocated to inflationary rent significantly influences whether working families can afford medicine, services, car notes, credit card bills and loans. High rent burdens, where a significant portion of income is devoted to housing costs, can strain budgets and limit discretionary spending on things like an annual vacation. Moreover, excessive rent destroys savings efforts and hinders progress towards long-term financial goals such as homeownership or retirement planning.

As for feeding your children, food inflation is the worst in 30 years right now according to The Wall Street Journal. [vi] As a note, I recently volunteered with my family at a food bank this past year delivering food to families, and it is both distressing and shocking to see hardworking families seeking meals to get through the weekend. Everyone knows that food purchases are a vital component of monthly family survival, but now, healthy foods are generally out of reach for many working families for the first time in 30 years.

Damage in Inner Cities

Sadly, those in inner cities or urban areas will pay more for food costs, taxes, tolls, parking, bagging, and inflated costs for necessities. People in inner cities will typically pay more for food because of the high rents for stores, higher insurance, theft, litigation risk, and higher city real estate taxes on grocery providers, and so forth.

Many of these same issues of risk, taxes, insurance and government fees artificially crank up the rents on urban dwellers also. Rent and food expenses are integral components of monthly budgets, exerting a significant influence on individuals' financial well-being — but inflation and government mismanagement are putting working Americans in the “Poor House.” [vii]

To make things worse, politicians placed a 24.5% tax on your wireless internet bills in 2023. [viii] The other hidden blow to consumers is a charge of 22.6% in taxes and fees on typical airline tickets to attend a funeral for a loved one. [ix] [x]

The biggest inflation issues are actually now caused directly by the government with interest rates. At this time, we have the absolute worst inflation and lending rates n over 30 years on: credit cards, cars, homes, and student loans. The present lending rates on working families for credit cards stand around 22% APR annually. This could bankrupt anyone quickly who loses their job, is disabled, or is injured.

Toxic Taxes

In case you wondered, taxes and surcharges make up to 27% of every electric bill.  Thus, the hidden taxes, risks, lawsuits, and fees in the USA are toxic at this juncture with many abandoning high-risk cities and states like New York, Chicago, and San Francisco for survival purposes. [xi]

Understanding the totality of taxes, risk, and inflation is important to families, small businesses and even our nation. The combined amount of family monthly income allocated to rent, food, expenses and taxes is essential for effective budget management and long-term financial planning, but presently, many families are under water and losing savings with a record number borrowing money from their 401(k) or credit cards while even incurring more government penalties and fees. [xii]

Overall, President George H. W. Bush tried to tackle these same types of inflationary issues in 1992, but lost horribly in the presidential election with the Clintons taking the election with a meager 43% of the popular vote. Essentially, that meant that 57% voted against the Clintons. [xiii].

At this time, it is too late for the Federal Reserve to stimulate the economy by lowering rates, and with that in mind, state and local politicians are probably in for a beating this November. Overall, American prosperity has been depleted in the last 3 years. Using basic data from the Federal Reserve, if the Dow Jones Industrial Average had simply moved up in relation to monthly inflation over the last three years, its value today would be approximately 43,056.63 instead of 39,202.00. [xiv] Thus, seniors have been hurt significantly by inflation with their buying power injured year after year.

_______________
Commissioner George Mentz JD MBA CILS CWM® is the first in the USA to rank as a Top 50 Influencer & Thought Leader in: Management, PM, HR, FinTech, Wealth Management, and B2B according to Onalytica.com and Thinkers360.com. George Mentz JD MBA CILS is a CWM Chartered Wealth Manager ®, global speaker - educator, tax-economist, international lawyer and CEO of the GAFM Global Academy of Finance & Management ®. The GAFM is a EU accredited graduate body that trains and certifies professionals in 150+ nations under standards of the: US Dept of Education, ACBSP, ISO 21001, ISO 991, ISO 29993, QAHE, ECLBS, and ISO 29990 standards. Mentz is also an award winning author and award winning graduate law professor of wealth management of one of the top 30 ranked law schools in the USA.
 


[i] 1 in 8 U.S. households struggle with food insecurity: USDA (cnbc.com)

[ii] More Renters Than Ever Before Are Burdened by the Rent They Pay - The New York Times (nytimes.com)

[iii] New Report Shows Rent Is Unaffordable for Half of Renters as Cost Burdens Surge to Record Levels | Joint Center for Housing Studies (harvard.edu)

[iv] American Food Spending As Portion Of Income Hits More Than 30-Year High | The Daily Caller

[v] How Much Income Should You Spend on Rent? - NerdWallet

[vi] It’s Been 30 Years Since Food Ate Up This Much of Your Income - WSJ

[vii] Poorhouse - Wikipedia

[viii] Taxes on Wireless Services: Cell Phone Tax Rates by State (taxfoundation.org)

[ix] U.S. Government-Imposed Taxes on Air Transportation | Airlines For America

[x] Taxes on Wireless Services: Cell Phone Tax Rates by State (taxfoundation.org)

[xi] From plane tickets to pet fees: 8 hidden taxes draining your wallet | The Hill

[xii] More Americans are tapping retirement savings to cover emergencies (newsnationnow.com)

[xiii] William J. Clinton Event Timeline | The American Presidency Project (ucsb.edu)

[xiv] https://fred.stlouisfed.org/graph/?g=90S

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GeorgeMentz
Americans are at war with a horrible economy. According to CNBC, about 12% of working families in the USA have serious life insecurity and can't afford meals, rent, health care, a vacation, or credit card bills.
inflation, income, biden, rent, food, gas
1229
2024-00-26
Monday, 26 February 2024 09:00 AM
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