When Is a Dollar Not a Dollar? Taxes, Poverty, Economics & Justice

A dollar costs some more than others.  Economics isn’t all arithmetic.  Thus all dollars are not created equal.  A dollar costs me some spare change in my purse.  But a dollar costs some people a week of labor.  If you’re poor, a dollar is a bag of rice, which can feed your family for a day.  If you’re the widow Jesus watched at the temple, even less than a dollar can be all that’s left between you and starvation.

It is at best a fundamental failure to understand that all dollars are not created equal that is leading to the call by many governors to eliminate or substantially reduce income taxation in their states under the guise of economic stimulation.*  They are, perhaps, merely mirroring the national election debates, all of which, from all political spectra, emphasized the middle class.  The poor were seldom, if ever, even mentioned.  It’s past time they were.  I say ‘they’ for one simple reason: I am not poor.

Economics that is theoretical is a waste of time.  Economics that does not take realities into account is worse than a waste of time; it is an attempt to alter our understanding of reality, to distance ourselves from it, that we, the wealthier, might be insulated from the sting of the poverty of another.

Social justice that ignores economic injustice is no justice at all.

Charity is what I am free to do or not do out of the goodness of my own heart.

Justice, on the other hand, is what I owe to my fellow human beings.

It is an enormous difference.

I can congratulate myself on my charity.

But justice is like breathing; it is necessary, even essential, to my, to our, continued existence.  Who congratulates themselves for breathing?

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*What calls to eliminate state income taxes generally leave unsaid is the simultaneous implementation or increase of sales tax to make up the difference.  Sales taxes affect every consumer exactly the same.  Well, isn’t that fair?  No.  It isn’t ‘fair’ because of the fact that all dollars are not created equal.  Flat taxes that hit rich and poor alike are called ‘regressive’ for a reason.  To regress is to go backwards and in the case of flat taxes, what we do is back away from justice for the poor, those who have less than I do.  They are not a disease.  They are not a ‘problem’.  They are people.  “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets and to steal bread”, observed Anatole France.  The irony is as obvious as it is cruel: it is illegal for both, but it is only a necessity for one.  Another quote comes to mind: “To whom much is given, much is required.” [Luke 12.48].  Waging economic war on the poor is not merely unseemly (although it is certainly that); it is unjust.  I suspect the origins are not in some overtly evil impulse; rather, it is a case, I think, of governors and others similarly situated, simply having little, if any acquaintance, with the folks their laws impact adversely.  A friend at a cocktail party observes how hard the current taxes hit them and their friend the governor starts thinking about how to help these friends and believes, because friends don’t lie to friends, after all, the lie that helping the friend will help ‘everyone’.  While they smile and tip their glasses, there are no poor people present to protest, to point out that the change will be on their backs.  Maybe governors and presidents and the like should be required to, at the least, join the movement to live on a poverty-level income for a month.  Maybe then some eyes would be opened.

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A sampling of governors calling for elimination or substantial reduction in income taxes to be made up with simultaneous increases in sales taxes:

Governor Sam Brownback, of Kansas, per The New York Times:

. . . there is significant concern in Kansas over the cost of the tax cuts, which is expected to total nearly $850 million in the coming fiscal year. In the budget he presented last week, [Governor]  Brownback proposed to help cover the cost of those cuts by keeping in place a sales tax increase that was scheduled to expire this year and by eliminating the mortgage interest deduction. . . Critics say Mr. Brownback’s tax cut was passed on the backs of low-income Kansans. The bill included the repeal of tax credits for food, rental housing and child care that benefited low-income residents. Because of those repeals, the poorest 20 percent of Kansans will spend an additional 1.3 percent of their incomes, an average of $148 per year, on taxes, according to a report by the Institute on Taxation and Economic Policy. The top 1 percent, meanwhile, will see the share of their income that goes toward taxes drop by 2 percent, or $21,087 per year, the report said.

Governor Bobby Jindal of Louisiana, from The Advocate:

Gov. Bobby Jindal said Thursday that he wants to eliminate the state’s personal income and corporate taxes. . . [To make up the difference] Alario, R-Westwego, said Jindal administration officials discussed a 1.6 percent increase in state sales tax during a meeting with legislative leaders this week.  

Governor Dave Heineman of Nebraska, from The Daily Nebraskan:

Gov. Dave Heineman made a bold proposal during his State of the State address Tuesday — eliminate the state income tax. . . As a means to make up for the lost revenue, Heineman’s proposal would also end $5 billion in sales tax exemptions [although food would continue to be exempt].