There are many advantages to dropping out from the fast and costly pace of city living, and the second most important reason from a savings standpoint is the elimination of tuition payments to private schools.
City living is too costly for many reasons including the fact that public schools in most large cities have not been able to perform as well as private schools and most persons who choose to live in a major city also resign themselves to pay the high costs of tuition for placing their school-age children in private schools, ranging from kindergarten to high school, a total of 13 years of private schooling for each child.
As any parent knows, the price of tuition goes up each year as the child progresses through the grades, and the tuition seems to go up each year for the same grade, as well. Now, in New York City parents pay as much as $13,000 to $20,000 for a child in a private high school.
The cost to the parents is far more than this, as any parent with a child in private school can attest.
A parent has to earn an additional $40,000 pre tax to be able to pay the $20,000 in annual tuition for one child. Taxes to the federal, state and city income taxation authorities takes about 50% of the $40,000, leaving $20,000 for the parent to pay as tuition to the private school.
For parents without a job, or with a reduced income due to down sizing, this payment of $20,000 can be met, temporarily, by credit card borrowing, second or third mortgages on real estate owned by the parents, by borrowing from family or retirement funds, or by pleading poverty and asking for financial help from the private school.
But these techniques for paying private-school tuition are generally not sustainable, especially if the family has more than one child of private-school age, or has children in or going to start college.
The way of beating this psychologically and economically crippling expense is to DROP OUT, and remove the family to a DROP OUT community where the schools are often as good as private schools, sometimes better, and enable the family to save $40,000 per year in pre-tax income which would otherwise be needed to pay the private tuition bills for each school-age child.
Looking at this in another way, how else could you get an immediate raise of $40,000 per year? This is the effect of moving to a DROP OUT community and saving the $40,000 in pre-tax income needed to put one child through a private school in a major city.
The alternative of putting your child into public school (with rare exceptions such as Bronx Science High School and Stuyvesant High School in New York City) is unthinkable for most parents with children in private schools.
For many persons, this one money-saving feature justifies looking into, as quickly as possible, the change of lifestyle advocated by the author.
There are many other reasons, but few as compelling as this $40,000 saving per year, per high-school child. Tuition in lower grades is lower, of course, but the amount will grow, and it probably would be best to position yourself in a DROP OUT community as quickly as possible, to maximize the benefits which you can obtain from your change of lifestyle.
For persons unfamiliar with public schools in major cities, a few words may be useful. Many teachers in public schools refuse to send their own children to the schools in which they teach. Many high school and junior high school children are found to be carrying weapons, some children because they are criminal types and other children because they feel the need to have some protection from other children carrying weapons or a propensity to rob and maim, just for kicks.
Public schools have found themselves unable, generally, to rid themselves of the bad actors (or the non-performing teachers), and the schools have degenerated into something less than educational opportunities for the children relegated to the schools for their parents' inability to afford tuition to pay for any of the numerous private schools in the city.
The solution to the problem of public schools in the large cities seems to be the same as most other problems we face, which is competition. If schools were allowed to compete, including a competition for teachers and for students (translated to mean to be able to get rid of bad teachers and trouble-making students), and to offer programs and educational opportunities free of bureaucracy, the city schools would turn around and be a threat to over-priced private schools. In due course this has to happen, but meanwhile enrollment in a free school of a DROP OUT community is the better deal, by far, and is the only deal for parents who cannot afford to devote $40,000 in pre-tax income each year to pay private tuition for each child of high-school age.
Thus, high on your list of reasons why you should drop out is to save $40,000 (or less) in pre-tax income per year per child of public-school age.
[preserving author's break here]
Before jumping to the main problems, I would like to discuss the problems of the differing tax consequences between private and public grade school education and between ownership and rental of a family's housing unit. Public policy has created a major eroding force for the standard of living of persons sending their children to private school and for persons who rent instead of own their housing unit (usually because they are too poor to buy).
When a family in New York City, for example, pays $15,000 per year in tuition to put a child through private high school (instead of sending the child to a public high school, to avoid the higher risks of drugs, violence, gangs, and lack of a good education), the family has to set aside, in its mind, $30,000 of gross annual income, pay a tax of 50% on the $30,000, and then turn over the remaining $15,000 to the school for the annual tuition payment. $30,000 per year for one child means $600 of earnings per week, 52 weeks per year, for just one child in private high school. Two children in private high school means $1,200 per week in pre-tax earnings which have to be set aside for tuition. Obviously, unless you are earning a hell of a lot of money, you have to be poor to reside in a city such as New York, if you put one or more children into a private high school. The effect on the standard of living for such families is devastating. Ask anyone from April to September, or beyond, who has to pay $15,000 to $30,000 or more for private school tuition. Also, this applies to college tuition, as we'll see later. Private school education is such a major expense, in many cases exceeding housing costs, that the quality of life of families living in many cities is adversely affected either way: you're damned if you don't [put your kids into private school] and you're damned if you do.
For example, there are major consequences which can be predicted and created in knowing that many private colleges and universities charge $35 per hour for instruction when $2 would suffice. Micro-economics explains how this takes place, and suggests what can be done to eliminate this excessive cost, which has families paying perhaps $30,000 per year per student in pre-tax income to put one child through college when $4,000 or $6,000 would suffice.
Taxation makes most parents economic slaves when they find it necessary to spend their children to private grade, middle and high schools because government is unwilling to fix the known education problems caused by a strong teacher's union, civil service rules, due process requirements when a government terminates an employee. Parents, as we have seen, have to earn twice as much as the tuition, pay a tax of 50%, then turn the other 50% over to the private school as tuition, often leaving nothing left for meeting a decent standard of living.
The main point to remember about taxation is that it puts a substantial burden on the activity which can make it unprofitable to undertake with the taxation component, such as having to earn $30,000 a year to put a child through a private high school. Many more parents could afford $15,000 per year than could afford $30,000.
Another taxation factor is the real estate tax in the area in which you plan to move, and the quality of the schools, if you plan to make use of them. A low real estate tax rate coupled with home ownership, gives you a low overhead, something which cannot be easily duplicated when living in a city.
@CENTERHEADING = Ch. 10 - Restraints on Education and their Effect
The single largest item in the budget of many families is education, particularly higher education. The cost is often $15,000 per year for tuition alone (one student), but this means $30,000 pre tax (for one student). This chapter discusses how the colleges and universities charge about ten times more than they should, and what can be done to avoid this cost, as part of a plan to downsize one's own economy and increase one's own standard of living.
These giveaways are not obvious, and often exist as restraints imposed by law or regulation which prevent competition and require persons to buy from high-priced (and high-profiting) suppliers, such as the non-profit educational community, who are charging at least ten times what they would be able to charge in a free market for educational services.
students who can choose without forfeiting as much, and others may be able to restructure their personal economics to a much greater extent and actually improve their economic position substantially, from the way it is, or is heading, today.
Education can be obtained from good public schools without the need for private schools.
C. Rely on local grade and high schools (paid for by tax dollars) rather than private schools;
D. Rely on low-cost public colleges and universities instead of high-cost private colleges and universities;
E. Do not use any student loans, and avoid any schools which, to attend, you would have to take out a student loan to pay the tuition or living expenses.
Set up equivalent colleges to give equivalent, low-cost degrees in the locality at coop low prices ($1 per hour or less for instruction, using buildings which can't be rented), and employers would pay to get first crack at graduates; colleges would teach the new economics
Colleges and universities have been training graduates for the large companies at public expense and at monopolistic tuition charges, and the large companies no longer want to employ the graduates
Local businesses could finance equivalency colleges, as a draw to bring in new homeowners (low tax basis with own free college system); homeowners would pay back business with purchasing power
A most attractive part of the community would be its local school system which when starting out from scratch would be low-cost (consistent with other community goods and services) and could provide a vocational and/or college education at 1/10th to 1/20th the cost as the education provided by schools accepting student loan money. (To qualify for student loan money, a school must submit to excessive governmental and other regulation, which eats up most of the student loan money - called tuition - and often results in a substantially lower educational result for various reasons (including unions, civil service rules, tenure, perks, accreditation, control by teacher committees, duplication of offerings, political correctness, excessive courses, programs and departments, bureaucratic inefficiencies, and failure of faculty to know what the real world is seeking in its hiring of newly-trained students).
[end of chapter 3]
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Copyright © 1997 by Carl E. Person
Dropping Out and Dropout Community are trademarks of Carl E. Person