Low Taxes Aren’t the Problem

It’s really simple. The rich spend a lower percentage of their income on necessities. It’s not as if rich people are forced to pay more for bread or gas just because they make more. They might pay more for something than it’s worth, but that’s also their prerogative. It’s also the case that the rich are not impacted to the same degree by inflation. Of course, hyper-inflation will quickly make paupers of us all. But in this environment of steady decrease in the dollar’s value, the people hurt the most are the people with only a few dollars to their names.

New information keeps coming in confirming my hypothesis that the poor are suffering the most from the recent shift in taxation laws. The newly re-instated payroll tax doesn’t affect income over $113,000 dollars. Which means it has the greatest percentage effect on lower-income workers. Coupled with rising gas prices and fixed salaries, poor people are getting pummeled.

The Christian Science Monitor reports that retail stores are starting to feel the burn as well. Lower-income families are America’s biggest spenders at places like Wal-mart, and reports are coming in that these lower-income families are not spending like they used to. And that could mean Wal-mart and other retailers have to lay off some people. Which will mean some more lower-income workers are out of a job. Which means they won’t be paying for more stuff. Which means… you get the picture.

And this also means that low-income families are willing to do what the civil government just won’t do: spend less. Our civil government talks like higher taxes are going to save the day. This isn’t the case. Low taxes are not the government revenue problem. The problem is that the civil government is spending way beyond its already enormous budget. And in order to avoid its responsibilities, it continues to shovel the blame onto the rich. But taxes that make a huge difference to poor families won’t even scratch our budget deficit. They don’t make any difference at all really if the civil government isn’t willing to cut spending drastically. And based on the civil government’s doomsday reaction to the sequestration, I imagine they won’t be taking the knife to the budget anytime soon. Instead, they’ll keep preaching higher taxes, pretending the real problem is that some people are hording all of our precious resources and just won’t share like good little boys and girls.

But this demonization of the rich is nothing but rhetoric. In reality, it’s the poor people who are paying the price for our current political delinquency. They’re paying in higher prices, lower salaries, higher gas prices, fewer jobs, more dependence, less freedom, etc. I don’t know when people are going to wake up. Probably right around the time it won’t do any good.