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Here’s a paycheck for a McDonald’s employee. And here's my jaw hitting the ground.

The federal minimum wage is still less than this.

via JustFrugalMe/YouTube

How can anyone get by on this?

I've written extensively about minimum wage, supported by fact-checkers, economists, and scholarly studies. All of them support raising the minimum wage as a solution to lifting people out of poverty and getting them off public assistance. It's slowly happening, and there's much more to be done.

But when it comes right down to it, where the rubber meets the road is what it means for everyday workers who have to live with those wages. I honestly don't know how they do it. Ask yourself: Could I live on this small of an hourly wage? I know what my answer is.

(And note that the minimum wage in many parts of the county is STILL $7.25, so it could be even less than this).

paychecks, McDonalds, corporate power, broken systemOne year of work at McDonalds grossed this worker $13,811.18.via JustFrugalMe/YouTube

The YouTube channel Just Frugal Me discussed the viral paycheck and noted there's absolutely nothing wrong with working at McDonald's. More than 2 million people in the U.S. alone work for the fast food giant. The worker's paycheck shows they put in 72 hours over the pay period, making $8.75 per hour. Before taxes, that's $631 for the week. Just Frugal Me's breakdown is even more eye-opening, breaking down this person's pay after taxes and weighing across average rent and utility costs. Spoiler Alert: the total costs for basic necessities far outweigh what this person is making even while working 12 hours per day. But they do make too much to qualify for Medicaid, meaning they will have to go out and buy their own health insurance.

mcdonald's, minimum wage, restaurants, fast food, burgers, big macA photo of a McDonald's in Hartford, CT. via Mike Mozart/Flickr

Even in states like California, where the state's $20 minimum wage ensures that people earn nearly three times as much as the federal minimum wage, which remains as low as when this paycheck first made the rounds nearly 10 years ago.

Still, even for a worker that maxed out at 40 hours per week and took zero vacation or sick time, that's only a little over $41,000 per year. That's barely half the median wage in the state of $78,000 and far below a sustainable living wage in cities like Los Angeles.

- YouTubewww.youtube.com

The U.S. federal minimum wage is just $7.25 and hasn't been raised since 2009. In April 2025, the Raise the Wage Act of 2025 was introduced in the House of Representatives and U.S. Senate. The bill would increase the federal minimum wage to $17 an hour by 2030 and eliminate the subminimum wage for tipped workers and those with disabilities. But supporters should be cautious that it's unlikely to pass the Republican-controlled Congress.

If the Wage Act of 2025 were to pass, over $22 million workers would get a raise, which is 15% of the U.S. workforce. It would raise $70 billion for low-wage Americans, an increase of $3,200 per worker.

“No person working full-time in America should be living in poverty," Virginia Congressman Bobby Scott said in a statement. "The Raise the Wage Act will increase the pay and standard of living for nearly 22 million workers across this country. Raising the minimum wage is good for workers, good for business, and good for the economy. When we put money in the pockets of American workers, they will spend that money in their communities,”

This story originally appeared ten years ago. It has been updated to reflect new information.

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The IRS requires criminals to report and pay taxes on their illegal income. Yes, seriously.

@litcapital/Twitter

The IRS requires criminals to report their illegal income.

You know how sometimes you see something come through your social media feed and you think, "There's no way that's real," only to then have your mind blown when you find out it actually is real?

This is one of those times.

Twitter user @litcapital shared a post that appeared to be a screenshot from the IRS website with two entries on it:

"Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.

Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year."

Yes, you read that right. Dealing illegal drugs? Gotta pay taxes on that income. Stealing property? Gotta report that as income.

Surely this is made up, right?

Nope. Go here: https://www.irs.gov/publications/p17. Do a "Find" search with your browser and enter the word "illegal." Then put in "stolen." You'll find the entries listed under "Other Income," worded just like this.

We can all agree that taxes are overly complicated, and few of us have the time to read through every single IRS publication to figure them out. But requiring criminals to report illegal activity and stolen goods on their taxes? Really?

Someone had to actually come up with this policy. Someone had to say, "Hey, I think we should tell criminals that they have to report their criminal profits on their taxes," and someone else had to say, "Yeah, that's a good idea." Someone had to approve it. Someone had to type it up and publish it, too.

Did they all do this with a straight face? Was it a serious conversation? Did any brave soul say, "Um, that's stupid. No one is going to do that," because it's obviously stupid and clearly no one is going to do that?

That was my first thought upon seeing these tax requirements.

However, as it turns out, there actually is a good reason these policies exist. Illegal income does get reported sometimes, namely when someone has been caught (or thinks they're about to be caught) in some illegal activity and they don't want to get hit with a tax evasion charge in addition to whatever financial or property theft crime they've committed.

According to CNN Money, New England accountant Tom Hughes paid taxes on money he stole from his clients in 1999, 2001 and 2004. "I knew the money was taxable, there was no doubt about that," Hughes told the outlet. "I had already been caught, and I didn't want to face federal tax charges."

He now gives speeches on financial crime and professional responsibility. Go figure.

However, Hughes is the exception, as tax experts told CNN that most criminals don't report their illegal incomes. Duh. According to San Francisco tax attorney Stephen Moskowitz, most of those who do are facing embezzlement charges and are trying to avoid Al Capone-ing themselves. He has helped some of those clients document their illegal gains to avoid doubling their legal trouble due to illegal tax activity.

So basically, we have to have official tax requirements for illegal income in order for criminals to not be able to get away with tax evasion for that income. Still seems like a bizarre policy to actually write out in words, though, even if it makes sense from a legal perspective.

Humans are weird and money is weird and both things just seem to keep getting weirder. Yay us.

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Confused? This is exactly how the federal government's new Child Tax Credit works.

Photo by Kelly Sikkema on Unsplash

Families are beginning to receive direct monthly payments from the IRS, and some people seem to be confused about the what and the why of it. Heres' a brief explainer:

As part of the American Rescue Plan Act (passed by Congress and signed into law by President Biden in March), two things changed about the Child Tax Credit that families receive as part of their normal taxes. 1) The amount per child was increased, and 2) The distribution of those funds was changed for the year 2021.

Last year, the tax credit was $2,000 per child up to age 16, and the money was included in the calculation of a parent's tax return at tax time. (A tax credit is different than a tax deduction, just to be clear. It's basically a direct refund. A $2,000 tax credit is $2,000 handed back to you.)

This year, that tax credit amount was increased to $3,000 per child ages 6 to 17, and $3,600 per child under age 6. In addition to that increase, half of the tax credit amount will be paid out in monthly installments for the rest of 2021. The other half will be included in a person's tax return next spring, as usual.

The full increase amount impacts couples who earn up to $150,000 per year, or single parents making up to $112,500.

If you are a parent, you don't have to do anything to start receiving these payments as long as you filed taxes in 2019 or 2020. The money will come as a direct deposit or a check, depending on how you usually receive your tax return. If you didn't make enough income to file taxes those years, you have to sign up for the credit here.

President Biden explained briefly how it works on Facebook, but judging by the comments, the basic idea still isn't clear to many people. Some seem to have been unaware that parents always get tax credits for having children, and others believe that the extra funds are a free government handout instead of a financial hand-up that it's intended to be.

The COVID-19 pandemic took a particularly intense toll on parents, both logistically and financially—the extra funds for the tax credit increase come from the America Rescue Plan and are designed to strengthen the economy by putting more money back into the hands of working American families.

The Child Tax Credit changes in the American Rescue Plan only apply to the year 2021, but President Biden wants to extend this benefit beyond this year with the American Families Plan. Analysts have already called it a game-changer for child poverty. As The Atlantic reported:

"Despite the program not being targeted only toward low-income kids, our colleagues at Columbia University estimated that a child tax credit comparable to Biden's would cut child poverty by 45 percent. It would cut poverty among Black children by 52 percent and among Native American children by more than 60 percent."

Governments providing financial relief to citizens with children is nothing new. At least 10 wealthy nations provide universal child benefits to assist with the cost of child-rearing, either as a matter of course or as an incentive to counteract dwindling birth rates.

The White House website's information page about the Child Tax Credit for this year has some specific scenarios for families of various sizes and incomes to show how it works. But here's one real-world scenario:

My husband and I have two kids within the age range for the tax credit, and we make under the $150,000/yr income threshold. So here's the comparison between last year's tax credits and this year's for our family.

In 2020:

12 y.o. = $2,000

16 y.o. = $2,000

$4,000 total tax credits.

All $4,000 given at tax time.

In 2021:

12 y.o. = $3,000

16 y.o. = $3,000

$6,000 total tax credits.

Half ($3,000) will be distributed as $500 monthly payments from July through December of this year.

The remaining $3,000 will be given at tax time.

The one thing we have to be aware of is that while our family is receiving more money overall for 2021 ($6,000 vs. $4,000), we will see $1,000 less of a credit on our taxes than we saw last year come tax time, because of the distribution of half of the credits ahead of time. So more money in our pockets now, which is great. But we also need to make sure we're prepared for $1,000 less than we might have been anticipating on our tax return because we will have already received $3,000 in the form of the monthly payments.

For millions of families who have found themselves struggling due to job loss, furloughs, business shutdowns, childcare woes, and more, these increased child tax credits and advance payments will ease some of that economic hardship.

For more info go to www.whitehouse.gov/

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Replace libraries with Amazon? Not if these librarians have anything to say about it.

In case you didn't know, libraries are cool as heck.

They've been around for — well — ever (or at least thousands of years), there are more than 17,000 of them in the U.S., and they serve a myriad of purposes beyond just access to an unlimited number of free books (which, let's be honest, is pretty great in itself). Nearly all libraries offer access to computers and Wi-Fi, and many serve double as venues for community events. Best yet, libraries can help people develop the tools they need to combat the spread of false stories on the internet and identify reputable sources of information.

Don't worry! No books were harmed in the making of this photo. Photo by Thomas Lohnes/Getty Images.

With all those awesome things about libraries, it's kind of mind-boggling that someone call for them to be replaced by Amazon.

Economics professor Panos Mourdoukoutas published a (since deleted) blog at Forbes on July 21 arguing for shutting down local libraries in favor of brick and mortar Amazon stores "in all communities." His argument centers around the idea that "third places" like Starbucks and affordable content-streaming options like Netflix and Amazon Prime have all but made libraries irrelevant.

He wrote:

"Amazon Books is a chain of bookstores that does what Amazon originally intended to do; replace the local bookstore. It improves on the bookstore model by adding online searches and coffee shops. Amazon Go basically combines a library with a Starbucks.

At the core, Amazon has provided something better than a local library without the tax fees. This is why Amazon should replace local libraries. The move would save taxpayers money and enhance the stockholder value of Amazon all in one fell swoop."

According to the American Library Association, Americans check out an average of eight books a year, which costs them an average of $36.96 in total taxes. As far as plans to "save taxpayers lots of money" go, this is a pretty huge dud.

Naturally, librarians weren't exactly thrilled about the idea.

Not to get too snarky here, but if you're planning to write an opinion article about why a private company should replace a public good, a librarian would be the perfect person to help with your research.

Many (correctly) said that the article's premise seemed to ignore the fact that there are millions of low-income individuals who rely on libraries. Replacing them with Amazon stores would take away their ability to apply for jobs, learn new skills, or just be able to read bedtime stories to their kids.

And not everyone has the cash to dish out for a Netflix account, either. A year of Netflix costs more than the average taxes that go to local libraries.

Plus, there's a community element that just can't be replaced by a for-profit company like Amazon. When the end goal is to make money versus to provide a service, events that don't help increase profits get cut.

The idea that physical books are some kind of relic of the past is simply false.

Some suggested that maybe, just maybe, the author hadn't actually visited a library in recent years.

And others reiterated this idea wouldn't actually save people who need libraries any money.

If there's a lesson to be learned here, it's that replacing public services with private ventures is a bad idea. That and don't piss off librarians.

Libraries are a lifeline to people of all income levels. Replacing it with something that would cater solely to middle and upper class families in order to save $40 a year won't exactly elicit a standing ovation from most people.

According to these tweeting librarians, it sure sounds like Mourdoukoutas didn't do his research. If only there were a place where he could go to read up on subjects he doesn't quite grasp...

OK, so this is a runway model during some sort of library-themed fashion show in 2015. Photo by Tristan Fewings/Getty Images.

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