Taxing the poor

I just listened to a very good NPR podcast called “Taxing the Poor”. It’s very interesting and I agree with the overall premise. They look at Alabama (but most states and provinces have this) and all of the taxes that hurt disporportionately people at the lowest end of the economic spectrum. Sales taxes are a good example. The rich and the poor pay the same tax on a can of pop – but on a percentage of income basis the poor pay a much higher rate.

I don’t know how this translates to Canada which has HST rebates, child tax rebates, etc. designed to mitigate this effect somewhat on the lower end of the spectrum. It’s my feeling that in Canada these taxes (sales, gas, property, fees) hit the middle class far more here than in other places. Once you get just beyond the HST rebate, child tax rebate levels, you are being taxed on all these items full bore and you have property tax and of course provincial and federal income taxes for which the highest marginal rate, I would argue, hits people in the maybe ‘upper’ middle class.

But that really wasn’t my point. I was disappointed when the journalist brought the $800 million in tax breaks for the recent steel plant into the equation. The poor people that were interviewed were outraged by this. They were livid that a large German firm could get massive tax breaks while they couldn’t buy bread. I thought the thing was completely skewed. What about the 2,000 high paying jobs for Alabamans? What about the fact that the taxes wouldn’t be paid either if the firm had chosen South Carolina or New Brunswick? It’s a complex issue, I don’t doubt it but NPR played fast and loose with this issue and at the end it was flat.

At some point, somebody has to show the link between economic development efforts and helping the poor, helping fund social programs, helping raise the economic standard of living.

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0 Responses to Taxing the poor

  1. mikel says:

    Again, way off base. Studies have now essentially concluded that the massive bail out of corporations and falling corporate taxation hit the poor VERY disproportionately.

    A tax break is a tax break, you may want to make the argument that ‘its maybe not so bad so long as some jobs come out of it’, but thats not a fact or a statistic-that’s your OPINION, and certainly NPR is under no obligation to pay lip service to people’s opinion.

    Much similar arguments were made during slave years, after all, slaves were fed and cared for, they were the ‘means of production’. SO the argument was made that ‘owning people’ wasn’t so bad because the people all had employment and didn’t have to worry about where their next meal came from.

    That’s NOT an outlandish example, because those people who can’t buy bread are in the same boat with St. Johners who can hardly buy bread. You can argue that Irving creates some jobs, but the fact of the matter is that their business is being propped up by the very people who can’t buy bread. And its WAY off base to do like that poster before who tried to call it the ‘free market’, that’s a complete joke. Old KC MAY have been an entrepreneur, but he’s long dead and the current companies certainly aren’t in that boat.

    You are of the opinion that meagre lousy paying jobs are morally superior to getting welfare or being poor, but that’s not a given.

    Canada is essentially a resource and public driven economy, in other words, all the ‘money’ that the people have are directly gained by what WE own (or ‘should’ own collectively). In other words, like Norway there is no reason for poverty or unemployment to even exist, its not a given or a necessity. It’s simply a matter of priorities and these people know it. Again, NB is a perfect example, a small province of fewer than a million people would have been VERY wealthy had all the wealth from the resources actually gone to New Brunswickers. Instead, the province barely does better than PEI, which hardly has any land at all, and most of it is private, and arguably worse than Nova Scotia, where the people (collectively) hardly own any of the land base either.

    Poverty results because of a lack of shared resources, that’s pretty much a given now. Take any example from the past twenty years and its pretty conclusive. So that people are supposed to accept gruel and call it caviar is as suspect down south as NBers are to ask why they are paying higher taxes while Irving gets a pass on paying property taxes on their LNG plant. The argument that ‘jobs and construction come out of it’ simply is not pertinent to that particular debate. Particularly when all the costs are added up.

  2. nbt says:

    At some point, somebody has to show the link between economic development efforts and helping the poor, helping fund social programs, helping raise the economic standard of living.

    All those who have low salaries and who draw from social assistance programs, don’t pay income tax. So maybe if you’re looking for a societal solution to the burden placed on economies by poverty, look no further than the “guaranteed income supplement” which Hugh Segal has proposed. He believes this would be an alternative to welfare because it would put more money in the hands of the poor while allowing them more freedom to contribute (while giving them incentive to better themselves).

    However, that just may reduce the incentive for many to work. And unfortunately, we know all too well in our neck of the woods what happens to regions where this ethos becomes entrenched.

  3. mikel says:

    Actually, the reverse is true, and most people know it. The poor pay far MORE a percentage of their income in tax than the wealthy do. Go ask somebody earning 20 grand a year how much money they have in investments.

    This is especially true in NB, which taxes the poor at a higher rate than most of its neighbours. There is a difference, of course, between ‘poor’ and ‘destitute’.

    The guaranteed income investment is a HUGE topic and its to bad that there isn’t someplace where people talk about those issues (David can’t post about everything). Like any program, the devil is in the details, suffice it to say that the GII has had support from all political stripes, at least those who actually want to deal with poverty.

    It’s been awhile since I read on it, but essentially it operates to serve the same problem as equalization has created-namely, that in order to get ‘investment’ you have to sacrifice your ‘handouts’ and so there is little impetus to getting even poorer in order to obtain something that is not certain (a better job in this case).

    The GII is designed because of the prevalence of the ‘welfare trap’ that even people who benefit from welfare will tell you is the chief problem. The GII enables them to keep their benefits while attempting to create conditions where welfare won’t be a necessity.

    The problem, of course, is the regional one about how you try to ‘better’ a person who lives in an area where there ARE no better jobs anyway, even if they did get more education, etc.

    But again, those people are not even an economic problem anymore. By NB’s own statistics the vast majority of poor people are there because they CAN”T work, NOT because they are as lazy and shiftless as NBT says.

    THere are other ways of dealing with that, but usually the government is part of the problem. Lots of those problems would be overcome if industry actually had to PAY for the often poor working conditions that result in the disabilities. In other cases the government is directly complicit, like in allowing aerial herbicide spraying and heavily polluting industries without regulation.