Posted on 12/11/2012 4:23:06 AM PST by RoosterRedux
With all the talk about taxing the rich, we hear very little talk about taxing the poor. Yet the marginal tax rate on someone living in poverty can sometimes be higher than the marginal tax rate on millionaires.
While it is true that nearly half the households in the country pay no income tax at all, the apparently simple word “tax” has many complications that can be a challenge for even professional economists to untangle.
If you define a tax as only those things that the government chooses to call a tax, you get a radically different picture from what you get when you say, “If it looks like a tax, acts like a tax and takes away your resources like a tax, then it’s a tax.”
One of the biggest, and one of the oldest, taxes in this latter sense is inflation. Governments have stolen their people’s resources this way, not just for centuries, but for thousands of years.
Hyperinflation can take virtually your entire life’s savings, without the government having to bother raising the official tax rate at all. The Weimar Republic in Germany in the 1920s had thousands of printing presses turning out vast amounts of money, which the government could then spend to pay for whatever it wanted to pay for.
Of course, prices skyrocketed with vastly more money in circulation. Many people’s life savings would not buy a loaf of bread. For all practical purposes, they had been robbed, big time.
A rising demagogue coined the phrase “starving billionaires,” because even a billion Deutschmarks was not enough to feed your family. That demagogue was Adolf Hitler, and the public’s loss of faith in their irresponsible government may well have contributed toward his Nazi movement’s growth.
(Excerpt) Read more at humanevents.com ...
With all the talk about taxing the rich, we hear very little talk about taxing the poor.
We hear even less about corrupt government Fat Cats lowering taxes and ceasing the long-established practice of purchasing votes from individuals and interest groups with their hands out for money extorted from their neighbors.
They are dealing with the wrong issues first.
It is the printing press that needs to be slowed first...
A gradual slowing of the printing press would be the greatest easing we could get!
Agree 100%, but when Gerald Ford did that, prices rose to match the inflation of previous years, in other words we began to pay back what had been printed.
Consequently, he was blamed for the inflation and lost to Jimmy Carter. I do not think there is a politician, save 1 or 2, with the courage to do that.
I thought the poor were part of he 47% who pay no taxes” It is the 47% who should be paying some taxes If I pay, everyone pays!!
What the government taxes we get less of. What the government subsidizes we get more of. Quit taxing success and start taxing failure. In other words lower taxes on the high earners and raise taxes on the under achievers.
But....it has to happen.
I agree there will be some inflation, but the value of the dollar should rise. The first year will be the hardest, just like the crash.
The “trick” is a gradual slowing, not an abrupt stop.
Even their precious Keyesnian model calls for them to eventually reverse the printing. Value must be put back into the system. Raising taxes and cutting entitlements only treats the symptoms at this point. Neither truly puts the value back into the economy.
Sowell’s article could easily apply to Obama’s energy policy. Which Romney ignored, is in effect, and now accepted .
I have no sympathy left for the “poor” or the “middle class” in America anymore. I would like to see massive taxes levied on EVERY American citizen, so that they can finally understand just what they are doing to America with their votes. The lefty (and righty) politicians who are spending our nation into insolvency have successfully disengaged about half the population from finacial responsibility. There is no cause and effect to learn from. As long as a large portion of our population isn’t paying their fair share of our increasingly massive debt, their will be no hue and cry from the population, to not only stop the excess spending but also to begin paying off the debt. The unwashed masses in America have been hoodwinked into thinking that “the rich” can afford to pay back the debts incurred by Washington. Nothing could be further from the truth. If you confiscated 100% of the income of the highest 2% of income earners in America, you couldn’t even balance the annual budget. We will never get well until the “poor” and the “middle class” finally start paying THEIR fair share and modifying their voting behavior.
If you buy Gas for your car—you pay taxes—lots of them.
n the News/Activism forum, on a thread titled Sowell: Taxing the poor, Forward the Light Brigade wrote:
If you buy Gas for your car—you pay taxes—lots of them
Obama’s energy policies not taxes have driven up the costs of energy and have reached into every demographic pocket.
I agree. With so many millions of people with “no skin in the game”, it is easy for them to continue to think things are great as long as their freebies keep coming.
There are a few taxes that tend to effect the poor more heavily than they do the rich, or at least the more well-educated part of the population. They are the lottery and the taxes on tobacco products.
“a few taxes that tend to effect the poor”
AFFECT (doggone homonym!)
What useless polemicy(?).
Taxing the poor’s ‘rich’ landlords, grocers, employers, etc is taxing the poor.
Everybody knows that, how about someone saying it!
Taxing money from the private sector takes money mainly from the poor no matter who writes the check.
The Economic Consequences of the Peace (1920), John Maynard Keynes observed:
“Lenin (the founder of the former communist Soviet Union) was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose”.
In 2010 I ran for the US house in the most liberal district in Massachusetts. I was excoriated by "conservatives" that told me I must promise to sponsor their pet projects, that I was ridiculous when I spoke of curtailing social security, medicaire, Dept. of Education, and un-employment.
If "conservatives" are only paying lip service to doing what needs to be done, then it seems like a hopeless cause.
In the book The Wealth of Nations, Smith analyzes the effect of different types of taxation on society and the economy. His concern was not one income group or another beyond the effect that different types of taxation upon those groups would affect the economy as a whole.
Even a casual reading of the subject will require one to conclude that every tax, every duty, every tariff affects every member of a society that is participating in commerce. Value or cost is composed of three factors, cost of production, rent, and profit. Often profit is a function of the two former. Any time a tax causes an increase in production cost, whether that be a tax on income, property, consumption or increased value, the bottom line will always mean an increase in final cost and therefor a tax on every individual that purchases goods.
The discussion concluded that the poor are least affected by taxes on land property (although the habitation available for the available currency decreases), and sales taxes on luxury items. And because these affect the lower income levels least in purchasing power, there is little need for increased wages to pay for their sustenance and therefor no cycle of increased costs for production, allowing the upper income and lower income brackets to save capital for investment and improved economy.
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