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Broke Kansas To Tax Poor People By Placing $25 Limit On ATM Withdrawals

Tyler Durden's picture




 

On Saturday, May 2, Kansas Gov. Sam Brownback left Boss Hawg’s Bar-B-Q without leaving a tip for waitress Chloe Hough. 

It wasn’t that Brownback intended to shortchange his server, but rather when he received his credit card voucher, Hough had marked through the tip line and scribbled the following message to the Governor: “Tip the schools.” 

Around an hour earlier, Hough posted this message on Facebook:

"You guys 911 emergency. It's my last shift and I am waiting on our governor. What should I say to him. This is not a test. Go."

The animosity stems from Brownback’s move to push through a series of tax cuts, an “experiment” which eventually backfired, producing an $800 million funding gap which is in turn squeezing the public sector to the point where some schools are now being forced to file for emergency funding in order to make payroll. 

Here’s a look at the situation...

If, as the above suggests, the Governor was already unpopular with low-income Kansans, the situation isn’t likely to improve anytime soon because as The Washington Post reports, the state will now place a $25 daily limit on ATM withdrawals using a state-issued benefits card. 

Via WaPo:

Legislators in Kansas, not trusting the poor to use their money wisely, have voted to limit how much cash that welfare beneficiaries can receive, effectively reducing their overall benefits, as well.

 

The legislature placed a daily cap of $25 on cash withdrawals beginning July 1, which will force beneficiaries to make more frequent trips to the ATM to withdraw money from the debit cards used to pay public assistance benefits.

 

Since there's a fee for every withdrawal, the limit means that some families will get substantially less money.

 

It's hard to overstate the significance of this action. Many households without enough money to maintain a minimum balance in a conventional checking account will pay their rent and their utility bills in cash. A single mother with two children seeking to withdraw just $200 in cash could incur $30 or more in fees, which is a big chunk of the roughly $400 such a family would receive under the program in Kansas.

 

Since most banking machines are stocked only with $20 bills, the $25 limit is effectively a $20 limit. A family seeking to withdraw even $200 in cash would have to visit an ATM 10 times a month, a real burden for a parent who might not have a car and might not live in a neighborhood where ATMs are easy to find.

So Kansas, in an effort ostensibly designed to ensure that welfare recipients aren’t spending government cash on liquor, fortune tellers, luxury cruises, swimming, or movie watching (see list below), will essentially charge poor people for... well, for being poor. 

Clearly, there are a number of talking points here, but it's worth reiterating the fact that this may wind up being counterproductive.

That is, if someone intended to put say, $300 of their benefits towards a cash rent payment, they would have to go to the ATM on fifteen separate days and pay a fee each time (unless they can find an ATM that dispenses 5s). If they have no checking account (which applies to about a quarter of low-income families, studies show) that means that withdrawing $300 would cost somewhere in the neighborhood of $45 all-in. That's $1 to the state for each withdrawal (the standard fee) plus an assumed $2 bank ATM fee for each trip. That amounts to a sizeable rent increase and will only serve to further impoverish recipients, making it more likely that they will remain dependent on the public purse, thus driving up the cost of the program for taxpayers. 

Whatever the implications turn out to be, Kansas is now (literally) taxing poor people while simultaneously cutting funding to schools after a series of tax cuts for the wealthy bankrupted the state.

Between these types of legislative moves and central bank policies explicitly designed to inflate the assets most likely to be concentrated in the hands of the wealthy, it would appear that exacerbating the wealth divide in America is becoming official government policy.

*  *  * 

Bonus: Here is the official list of places poor people cannot use their welfare money in Kansas as of last month:

PLACES WHERE CASH ASSISTANCE COULD NOT BE USED

- Retail liquor store

- Casino

- Gaming establishment

- Jewelry store

- Tattoo parlor

- Massage parlor

- Body piercing parlor

- Spa

- Nail salon

- Lingerie shop

- Tobacco paraphernalia store

- Vapor cigarette store

- Psychic or fortune telling business

- Bail bond company

- Video arcade

- Movie theater

- Swimming pool

- Cruise ship

- Theme park

- Dog or horse racing facility

- Pari-mutuel facility

- Sexually oriented business or any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment

- Any business or retail establishment where minors under age 18 are not permitted.

 

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Thu, 05/21/2015 - 21:53 | 6119825 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119827 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119828 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119829 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119830 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119831 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:53 | 6119832 not a yahoo
not a yahoo's picture

I call it forced labor.

Thu, 05/21/2015 - 21:54 | 6119834 not a yahoo
not a yahoo's picture

Who codes your comments section, ZH?

Thu, 05/21/2015 - 22:13 | 6119885 oooBooo
oooBooo's picture

So here we have the future and it looks just like the past.

Remember the attempts at company towns where the industrialists wanted to run the lives of all the employees. Tell them what they could do, how they were to live, what they couldn't do, that sort of thing. Keep them from squandering their paychecks. When that failed privately they started the processes to do it through government.

Welcome to the future.

 

 

Fri, 05/22/2015 - 04:04 | 6120391 Benjamin123
Benjamin123's picture

Henry Ford of "Fordlandia" fame tried to get his brazilian plantation workers to eat oatmeal for breakfast, work outdoors at 12:00 pm and go to church.

He also tried to get his rubber trees to grow in rows in a cartesian grid with even spacing.

Thu, 05/21/2015 - 22:33 | 6119933 anachronism
anachronism's picture

As I understand from this article, the shortfall in government funding was caused by tax cuts. I guess this is a fair demonstration of how ineffective trickle-down economics truly are.

Fri, 05/22/2015 - 10:39 | 6121408 A is A
A is A's picture

Cutting taxes without cutting spending is not trickle down economics. It's just another form of big government.

Fri, 05/22/2015 - 08:41 | 6120912 glock19
glock19's picture

Kansas' budget shortfall is $406 million for the fiscal year 2016 starting in June...not $800 million.  In addition, Kansas budget would be pretty much balanced if it was not for KS SCOTUS mandated increases in spending on school funding and increased Medicaid expenditures that have increased as a result of Obamacare.  The main problem in Kansas is even Conservative Republicans' are afraid of the Kansas Teacher's unions and refuse to trim school spending.

Fri, 05/22/2015 - 10:15 | 6121309 Immortal Flatulence
Immortal Flatulence's picture

"(unless they can find an ATM that dispenses 5s)" I live in CT, and despite the $20 bil standard, I have seen ATM's that dispnse $10 bills. Lower the standard and you have... more capital control. We're getting there folks, inch by inch. Plus the banksters make out more on fees.

Moar BONUSES! /sarc

Fri, 05/22/2015 - 11:09 | 6121531 Zymurguy
Zymurguy's picture

Meh, they are just trying to modulate how little they can give the slaves and still get them to vote for 'em.

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