The more you give the more you have. The only thing that does not change is change itself. The more you learn the less you know. Government welfare hurts the poor. The following were paradoxes. A paradox is a statement that seems contradictory on one level, but has some truth on another. With tax day coming up I would like to explore how government taxes hurt the poor. Many people like to justify high taxes by saying that they are helping the less fortunate through government welfare. The truth is that they are actually helping repress the poor. The government’s high tax rate hurts an individual because it decreases one’s ability to earn wealth, decreases one’s ability to give to charitable institutions, decrease the amount of money people can put away in savings accounts and decreases the ability of businesses to pay higher wages and increase the amount of people that they hire.
The best way to see how government taxes decrease a person’s ability to earn wealth is to look at the statistics. In the 1950’s an average person paid about five percent of their income to government taxes. Today an average person pays about fifty percent. Even that number is not really accurate. The reason being is that you cannot just look at the taxes you see. The government also taxes things like gas, cigarettes, hotels and often times it does not show. Then the government puts strict regulations on things, which increases the price of everything. In addition throw in the price of how much people spend to do their taxes be it record keeping, software, or an account. Dr. James Payne of the University of California estimates that the percent of a person’s income that goes to direct taxes, compliance costs, hidden taxes and regulations is seventy one percent of the average person’s income.
Having an average person lose seventy one percent of their income on account of the government hurts the poor. Granted that an average poor person does not pay seventy one percent of their income. However, they are still being hurt because, they too have to pay hidden taxes and the price of regulations. With the average person losing seventy one percent of their income to the government, how are they supposed to donate money to the poor? How can private organizations fully help the poor when their possible support base is being suffocated by government taxes and regulations? It is common knowledge that private charitable organizations are better able to help the poor. They have to be or people will not donate money to them. Due to volunteer work, adapting to situations and a strong need to be accountable for the money they spend private charitable organizations could help the poor a lot better then the federal government. However, these organizations because hurt because it’s hard for people to come up with spare money to donate to them. People are working too hard to ensure that they are not becoming poor because they are losing seventy one percent of their income.
With so much of a person’s money going to the government it’s hard to save money. At the very least people do not have the ability to invest as much money as they would if they had more of their income. This hurts the poor because by saving money in banks the interest rate decreases. A decreased interest rate allows businesses to take out more loans. The loans are then used to expand their businesses and increase their ability to hire more workers and increase their wages. People who spend their extra money on buying stocks are in essence also increasing the businesses ability to expand and grow. The poor are able to benefit by getting better jobs and better wages due to the expansion of the businesses.
Government taxes also hurt the poor because taxes hurt businesses. Businesses have to pay payroll taxes, income taxes, capital gain taxes, corporate taxes, inventory taxes, licensing fees, ect. With businesses paying so many taxes, their ability to hire and train new workers diminished. The business’ ability to increase the wages of their workers is decreased. Licensing fees and regulations also hurt a poor person’s ability to start their own business to get out of poverty. In New York it costs 142,000 dollars to get approval to run a taxicab. In Washington D.C. it costs 7,000 dollars to get a license for running a pushcart. Taxes hurt businesses, which in turn hurt the poor. Taxes are stopping the poor from starting their own businesses. The time is now to decrease our taxes. We need to decrease taxes to help those less fortunate then ourselves. Even if you still feel that the government needs to provide welfare to help the poor there are other ways we could cut taxes. End corporate welfare. Decrease defense spending and have the military actually defend the United States. Get rid of the pork in the federal budget. The US government does not need to pay for things like research on the mating habits of Californian kangaroo mice. The time is now to demand that our taxes be lower. The poor are depending on us.
Andrew Harris President College Libertarians of Albright [email protected] http://campuslp.org/ac To learn more or see the sources for this article please visit the web page.