There have been a number of posts debating whether one parent (well, CH mentality means the mother) should be at home with the kids.
Not many posts have touched the finances of having one parent at home.

Putting aside the populist attack on the banking sector, there is some thruth in the statements.

To add to the above, the tax system is counting on two-income families. Next to interest rates, taxes are the highests expense for a family.

It is a misconception that two incomes are needed to buy all those flat screen TVs, Lacoste shoes and Bali holidays. Money go to taxes, interest payments for house and education for the childeren. The middle class is collapsing under the burden.



If the above does not work, klick here.
Take the time to watch, it is really interesting lecture by the Elizabeth Warren who teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America's credit economy.

Is it true that the Swiss taxation systems is counting on two income families?

hahahahah.

two incomes are needed to buy flat screens lacosta tennis shoes and the like?

for some of us two incomes are needed strictly to put food on the table, pay the rent, buy the necessities (necessities meaning not holidays, luxury items, etc)...

Exactly my point ant the point that Elisabeth Warren makes.
That is why I posted this, as a balance to the provious threds that discussed one parent staying at home to take care of the children. Unfortunately, that is not an option for may families and not at all for single parents.

And what about the one person household where the one and only pays everything?? Not exactly a breeze, although sure, there's less food to buy.

@irinanaxten,
Very interesting lecture, but Ms warren talks about the American model of consumption. It is totally different here, as much as I have seen it by now there are lots of Swiss families with only one full income and a little part-time payed work for the wives, and they are doing just fine (for my standards). But, they don't have a car, they don't buy designer clothes, don't live in huge houses in the suburbs etc. So, in my opinion the one income family may actually work in Switzerland, as it means a total different thing than in the U.S.
It should be interesting though to have the same data for CH, regarding the level of the income earned by the males, as in U.S. was actually lower in 2005 compared with 1972.
Very intersting, thanks a lot.

No empathy at all from a perspective of single income family with three chidren.

4hrs of sleep and a bit brain fuzzy from being immediately beset with allergies this morning (happy spring ya'll!) has left me without patience to watch an hour long lecture on economics...

Meanwhile, I'm not quite sure the reasoning of posting a lecture regarding taxes, credit and bankruptcy among the middle class in America has to do with Switzerland...?


Anyhow... I'm thinking that folks living on credit (which means most if not all of "middle class America"), no matter whether they have one or two incomes, are destined for trouble at some point.

When I was 25 and someone would tell me they cut up their credit cards and are living within their true means, I thought they were nuts. Now that I am 40 and had decided to do the same thing in my early 30s, I offer the (perhaps somewhat "self righteous") advice that that really is the way to go.

Even if my hubby and I struggle with having "things" and have to save in advance of taking vacations, I really am in love with the idea of NOT being completely destroyed if (when) something happens and a lesser-paying job is the only thing possible.

Life is quite a bit more free if you don't have a mountain of debt hanging over your head.

Another way of looking at it is that the middle class is collapsing under the burden of paying for so many entitlements - "free" stuff is never really free - somebody is always footing the bill.

Government has no money and they don't create wealth so yes they have to get the money from somewhere to make the country run. And citizens should pay their "fair" share - whatever you think fair is.

In the US there are more entitlements then ever before and the definition of "rich" has been defined down to a lower and lower income bracket.

A millionaire decades ago was somebody that actually had a million $ in assets. During the '90s that was defined down to $500,000 and we stopped talking about millionaires per se and changed the term to "the rich". Now "the burden" (HA, that seems a strange way to look at it) of being rich has been hovering around the $250,000 level and if the new entitlements go through (health care, free college for all) we will probably be talking somewhere around the $100,000 level. And when politicians talk about it, of course they always talk about income levels before taxes.

Once you take away the taxes - yeah for a family in a high taxed state (CA, NY, NJ) you can be talking about the difference between feeding your kids steak or eggs.

But there is a degree of personal choice in this - like how many children you have, what you do to further your career, what your emphasis for happiness is. We were always blessed that I could stay home and be mother but agreed that if the day came that we had to make the choice, we said we would lower our standard of living. Unfortunately there are people who don't even have that choice. Especially now.

Your statement that "the tax system is counting on two-income families" is very true - counting on the workers so that the politicians can give away more. The one who gives away your hard-earned money is the one who gets to stay in power.

I wish there was a better way than one person having the right to stuff and the other person having the responsibility to pay for it but until then I guess we are stuck with what we've got.

We are already at a tipping point in CA and NY and folks are leaving those states. Some people are even leaving the country if they can because they recognize that the system is going to collapse under it's own weight and probably sooner than later.

A very interesting video but I agree with some of the other posters that it does not really apply to Switzerland:

The US economy is build around consumption. 100%. So people need to buy as much as possible to get the engine running. If consumer indexes are down, it is a major issue on CNN. The Swiss economy does not really care about local consumption too much: It is based on export of goods, especially some clearly defined sectors as pharma and high tech niches as well as of course the financial sector. The tax system is actually build for a family where a housewife stays at home. In most other countries there are either some laws asking men to take some time of the childcare months as well or tax incentives for a second income - here it is still the "traditional" model with one earner... needless to say who that is supposed to be.

But still an interesting video. Thanks.

Not really...
There are more stay at home dads here than lots of other countries i think. Especially Cyprus where a stay at home dad is unheard of

I'll second that, although I think that credit can be a good thing if it's used right. By that I mean if you use credit to pay for things that you can afford, but can't save for in a realistic amount of time.

For instance I got a loan to buy my first car. At the time my career had reached a point where any higher skilled, and paid, job required that applicants have a car and driving licence.
It would have taken several years for me to save enough to buy it with cash, and waiting that long was impractical. You could argue I was impatient, but the job market for the area I wanted to work in was quite buoyant at the time and I decided to chase after the opportunities while they were there!
So I got a loan, one where the monthly payments were what I would have put away to save up for the car. In that sense I could afford the car, just not at the time when I needed it, and I think it's situations like this where credit can be good.

As things turned out that car helped me get a better job, from which I gained a lot of experience and skills, which ultimately lead to me getting the job I now have now and moving here.

what is the definition of middle class now?

Given today's economy, having two incomes is like have two legs to stand on. Should the so-called "Financial Crisis" hit one leg, you can hop along until you recover.

That is not true. The domestic consumption is vital and the system is set up to support it. I.e., if you own a car, you are encourage to use winter tires during winter because if you happen to cause an accident, the insurance won't cover the damages. You are discouraged from changing you own tires, as you are not a car mechanic and thus you have to go to a garage...thus creating work for the garage. The is why, the Swiss economy doesn't perform well in terms of growth as the same Franc just goes from one hand to another. If it were based on export, than it would be very dependant on the global economy, which has cleary shown not to be the case. Another factor to prove that Switzerland isn't export driven, is that a great many industries a ruled by olygopolies. The Swiss system supports this no competition approach and makes it real hard for a new player to join the game...in the end, the consumer is getting royally ****ed.

Why should there be empathy? One should live within its needs..or am I wrong here?

Not to mention the extremely high markup on durable goods, such as cars, clothing and food. If the "Switzerland economy" did not care about local consumption so much, what's up with the cartels that control imports?

To be honest encouraging people to have a set of tires for winter and one for summer doesn't sound like such a bad idea. I know by experience that winter tyres make a huge difference between beeing able to stop on thin amount of snow and just plain skidding (think of all the sloped roads in Switzerland) and I guess in a way it keeps taxes down (ok maybe not such a large amount) by lowering the frequency of road repairs to non salted roads damaged by chains/studs and also reducing amount of salting on less travelled roads. If I was a smart insurance marketer I would offer a subsidy on winter tyres for people taking out a new policy. (Luckily I'm still on an English policy, no winter tyres no problem (winter tyres what are they )

I think money going from one person to another as described is pretty normal in life and is a fundamental basic of an economy.. or am I misled?

Do people in Switzerland not get to vote? If not thats the first issue if so then why don't people make a stand (about the insurance companies blackmailing them into using tyres that might save their life over winter) against the different tax rates in different kantons etc.

Or is it that when the rich people are happy so are the politicians and the rest all work too hard (have a burnout cost everyone in the country more money) to instigate change?

Oh and final comment. How big does a house for a two income family need to be, what kind of car should they drive (new/old/slightly dented/washed at an expensive carwash each week) and should they shun Lidl and Aldi as the Jone's next door visit Coop und Migros. Maybe a return to subsistence living with a small income for essentials is the way to go.. well bio products would sure be cheaper!