Six tax policies make the poor poorer. At many levels, governments promote barriers to progress for the poor, whom we Christians care about.
Writing in the WSJ this week, Andy Kessler opined, “There are only four things you can do with your money: spend it, pay taxes, invest it or give it away.” My point today is, paying taxes is the worst thing you can do with it. And, unfortunately, many tax policies make the poor, poorer.
Taxing Corporations
An article in The Epoch Times, titled, “White House Committing to Raising Taxes in Biden’s Forthcoming Budget,” quotes Press Secretary, Jean-Pierre saying President Biden would propose “Tax reforms to ensure the wealthy and large corporations pay their fair share while cutting wasteful spending on special interests like Big Oil and Big Pharma.” OK, let me pick the low fruit first: When the government takes YOUR hard-earned money via force and spends it on some foolish climate control boondoggle, they call it “investment.” But when tax breaks are given to oil companies, they call it “spending.” Get that: According to the President’s press secretary, NOT paying taxes is SPENDING for the federal government. Why? Because, she assumes the government owns all the money, and just allows individuals and corporations to keep some of it. That’s the only way you could consider a tax break, as “spending.”
But, my main point today: When you tax “large corporations,” that raises the prices they charge for the goods and services they supply. So, when they tax that large corporation called Wal-Mart, prices go up for the poor. Same thing for Dollar General and Kroger grocery stores. Taxes are not paid by corporations: The increase in costs gets passed through to the consumer. And, it’s a regressive tax, because poorer consumers spend a higher percentage of their income on the taxed goods.
Property Taxes
You might think that property taxes apply only to relatively wealthy people who own large homes. But, everyone has to live somewhere, and when property taxes go up, those increases are passed on to consumers who rent houses and apartments. Even those living in section 8 housing that is funded by the government, will incur increases in rental costs, because the taxes are passed through to the consumer.
The average tax on single-family homes in the United States increased 3 percent last year, to $3,901. That means poor families are taxed about $300 a month, whether they own or rent.
Tax Bracket Creep
In podcast #101 titled Inflating Inflation, I’ve pointed out that inflation is here to stay. In my quarterly forecast for the Christian Economic Forum, I wrote about inflation being “sticky,” that’s the word economists use when they explain that it can’t be reduced as quickly and as easily as the Treasury and Federal Reserve folks think it can.
Labor gets a raise, which causes an increase in the price of the products and services they produce, then consumers need a raise to cover the cost of goods, and the spiral continues. It’s sticky, and it sticks to poor folks, who make more money, but can’t buy more goods with it. But,