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Poor suffer the most from taxation



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.


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.



Despite all the political rhetoric today about how nobody’s taxes will be raised, except for ”the rich,” inflation transfers a percentage of everybody’s wealth to a government that expands the money supply. Moreover, inflation takes the same percentage from the poorest person in the country as it does from the richest.


Bigger bite


No wonder the Federal Reserve uses fancy words like ”quantitative easing,” instead of saying in plain English that they are essentially just printing more money.

The biggest and most deadly ”tax” rate on the poor comes from a loss of various welfare state benefits — food stamps, housing subsidies and the lik — if their income goes up.



Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University. Distributed by Creators Syndicate.




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