Funding Government on the Backs of the Poor

by Pa Rock
Taxpayer

My first foray into college life was back in the 1960's when I was avoiding the Vietnam War and, in the process, managed to eek out a bachelor's degree with a major in history and a minor in political science - two essentially unemployable fields of endeavor.  I will be the first to admit that I did not learn as much during that first bout with higher education as I should have - at least not in the classrooms - but I did redeem myself later on as I acquired four more college degrees throughout my working lifetime.

One fact that did stick with me from those first four years of college was this:  regressive taxes and fees are bad news for the working poor.  I don't remember the professor who drove that point home, but it was something that stuck and affected the way I thought about funding government over the ensuing years.  I have even banged on  about that subject in this blog on several occasions over the years.

A regressive tax (or fee) is one that impacts those less able to pay more than it does those with money.  Sales tax is an example of a regressive tax that is often cited.  I listened to a very educated man one time cite sales tax as the "fairest tax there is because everybody pays it."   And yes, everybody does pay sales taxes, but that does not mean that they are "fair."  The poor have to use a larger share of their income to make survival purchases than do the rich, and therefore they spend a larger portion of their available cash on sales taxes.

For the past several decades there have been strong anti-tax movements focused on lowering income tax and property tax rates, taxes that tend to affect people of means, and as those government resources declined, new revenue streams had to be found.  State and local governments increasingly turned to sales taxes and increased public-use fees to make up the shortfalls.  Governments looked for any ways to bring in more money without increasing direct taxes on wealthier individuals or businesses.  

Sales taxes began creeping upward, as did fees for government service.  In some states, for example,  the price for a copy of an official birth or death certificate rose from one dollar to five or ten dollars within just a few years.  Also within just a few years almost every state in the union created a state lottery - a revenue stream that tended to be funded by those who could least afford it - and many states legalized other forms of gambling as well.

Those regressive taxes and fees - and gambling - were ways to keep government operating without reaching deeper into the pockets of those who could afford to pay - and who, in many cases, were seeing greater personal profits because of the protections, privileges, and infrastructure provided by government.  Those same people of means were also far more likely to vote and to make political donations than were the working poor.

All of the above was my starting point this morning when I happened to catch the new segment of NPR's "Planet Money" on the radio.  This week's episode deals with the court-related fees that many states charge to their incarcerated populations.  Oklahoma was the example de jour.

I didn't catch all of the history on the topic, but the gist was that in Oklahoma it is harder to raise taxes than it is to lower them, and consequently the state went a couple of decades with decreasing tax revenues.   To create more revenue, one of the things the state did was to come up with a system of "fees" which they charged to the state's prison inmates.  When inmates left prison they were presented with a bill for a variety of things like victim's funds, fees for prosecutors and defense attorneys, prison library usage fees, counseling sessions, and all manner of goods and services, some of which had never been accessed by the inmates.   Often payment of these fees was tacked onto their release as a condition of parole, and if they failed to make restitution, they could be returned to confinement where they would presumably incur even more fees.

It was easy to see this system of fees - in many states and not just Oklahoma - becoming a harbinger for a sort of debtor's prison, something straight out of Dickens' Victorian England but that is supposed to be illegal in the contemporary United States.

The trend of sending parolees home in debt up to their eyeballs is another fine example of regressive taxation and fees - just one more way for the "haves" in society to shift the costs of government onto the backs of the "have nots," and a way to help insure that the "have nots" never have a chance to have anything.

Sooner or later a society built and maintained primarily on the labors and taxes of the poor will collapse under its own weight - or it will rise up and eject those who have hoarded the bounty of that society.