The Least, First

Monte Asbury's blog

Low income Iowans pay higher tax rates

with one comment

Hmm—and we thought taxation in America was progressive. None such here in my state. In fact, it’s tilted against those who have the least.

If you’re poor, you pay a higher net rate—especially in states that shift the burden away from income tax and onto sales tax. Details:[h/t Lori, via the newspaper of our youth, the Burlington Hawk-Eye.]

clipped from

Study finds low-income Iowans pay higher taxes

the bottom 60 percent of Iowa taxpayers pay roughly 10 percent of their income in state and local taxes.
Those in the top 1 percent, making more than $320,000 a year, pay 6.3 percent of their income in state and local taxes, the study said.

“The state sales tax has doubled in the last 25 years while we have made big cuts in income tax,” Ralston said. “This is not a good tradeoff if we want a tax system that better reflects a household’s ability to pay.”

For low-income families making less than $16,000 a year, 7.3 percent of the household income goes for sales and excise taxes. Those taxes consume 2 percent of those with household incomes about $127,000.

The report recommended that lawmakers once again expand the earned income tax credit that goes to the working poor, as well as allow local option income taxes to augment or replace local option sales taxes.
warned against any additional increases in the sales tax
the most regressive of taxes
blog it

Now suppose you make $16,000 a year.  When you pay taxes, you pay them instead of something you need.  You don’t fill your prescriptions.  You hold off repairing your car.  You don’t even think about going to the dentist or paying for a haircut, or getting your kid’s teeth straightened.

And you make it.  Until one thing goes seriously wrong.

Say, the car’s transmission fails.  No chance of paying for it.  No way to get to work on the other side of the city.  You lose your job.  You’ve got a tooth that’s hurting so badly you can’t eat, but you can’t afford to fix it – so you have it pulled.  And now you’re the ragged person on foot who is obviously missing a tooth and fast-food joints and big-box stores with whom you interview don’t really want someone looking like you working for them.

And the rent is due.  And the utilities are going to be cut off.  And you are so depressed you can hardly make yourself get out of bed and hit the street – but you’ll never get medication for it.  And you are one step away from homeless, bankrupt, and disabled.

But if you make $127,000?  You grumble about your taxes, but you pay them from your excess, not from your survival money.

And your health insurance paid for your prescriptions and most of your kid’s braces.  Your car looks good – your mechanic comes by and picks it up for maintenance.  You’ve struggled with depression sometimes, but with meds and counseling (thank God for that health insurance!), you’re making it.

And you look good.  Your hair is about the way you like it, your clothes are the ones you’ve chosen, your teeth are polished by the dentist every six months and you may well not lose one your whole life. Your kid is the straight-toothed, shiny-faced, always fed, hope-of-the-future kind of kid.  Matter of fact, you’ve got his college fund going pretty well.

If the car breaks down, it’s just an inconvenience.  Life goes on.  And your meds and checkups are up to date, so you don’t get sick too much.  You do have disability insurance, though, if the worst happens.

And you look at your kid, and then the other person’s kid, and you wonder what’s wrong with those people.  Their kid looks funny, he doesn’t know how to dress up – why don’t they teach their kids these things?  Who’s going to hire a loser like that?  Well, the Army’s offers a good deal, and education, too.  Your kid has no interest in that, of course – getting shot at – but for that guy, well, might make a man out of him.

– –

Proposals that will be on the table in the coming months to revise the tax code are about fairness, not socialism.  Our tax code takes survival money from poor people, but is is just an irritation to rich ones.  It can cost poor people their health, their teeth, their appearance, their homes, their jobs, a life with mental illness or physical disability, premature death, and a limited future for their children.

They’re not dumb.  They know what we’re thinking. “What’s wrong with them? Why don’t they just get a job and stop whining?  This is America – anybody can make it here – only losers never amount to anything.  I’ve worked hard for what I have. Why should I pay taxes so they can lay around and make babies who’ll cheat my kid out of a scholarship some day?”

And we drive to work on roads that money taken from them helped buy – money that might have paid for the dentist so they could keep their teeth, or replaced the old eyeglasses so they could pass the driver’s license exam, or physical therapy so they didn’t hurt so badly at work, or just enough rent to hold off the eviction notice that’s in the mail.

Tags: , , , , , , , , Monte Asbury

Written by Monte

November 12, 2008 at 1:55 pm

One Response

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  1. Beautifully stated and plenty easy for even Republicans to understand.


    November 20, 2008 at 8:25 pm

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