"AOC argues that the federal poverty line for “1 earner & a mother home full-time” should be $38,000 a year, as compared to the current line of about $26,000 for a family of four. She attempts to justify this by saying that the current line “doesn’t include cost of childcare, geographic cost of living, or healthcare.” What she neglects to say is that low-income households typically receive such items and many others for free or at greatly reduced prices.
In contrast, most U.S. households earn the money to pay for their healthcare, housing, food, childcare, phone service, and such items for themselves, while also paying taxes that fund these items for others. As a result, U.S. middle-income households consume only 26 percent more goods and services than the poorest fifth.
The impacts of this wealth redistribution are even more drastic for the richest fifth of U.S. households, who forfeit a large portion of their income to taxes and receive few government benefits. They report 15 times more pre-tax money income than the poorest fifth of households, but they consume only twice as much goods and services as the poorest fifth."