In this world nothing can be said to be certain, except death and taxes.
Benjamin Franklin wrote these words in a letter in 1789, and they seem to still ring just as true today as they did nearly 250 years ago. Taxes are a fact of life in America, as with pretty much everywhere in the world. The idea behind taxes seems pretty simple enough: Governments need money to take care of their people, so people give a portion of their money to the government and in return they get government services.
What seems fair to most people though is that everyone pays the same portion of tax, and no one group of people gets charged taxes that don’t apply to everyone else.
That doesn’t seem to be the case, however, when people look at who pays what in America. According to a study made by the Institute of Taxation and Economic Policy (ITEP), which published a study recently on who paid what amount of tax based on their social status, the group of people taxed the highest percentage are the people in the U.S. who make the least amount of money.
According to the recent study, which cites taxes filed for the year 2015, Oregonians who are a part of the lowest 20 percent of money-makers pay the highest amount of taxes on average at roughly 8.1 percent, whereas the top 1 percent of taxpayers pay only an average 6.5 percent. That 1.6 percent difference may not seem like a huge amount, but why are the poorest people paying a higher tax rate than the richest?
Oregonians are actually lower on the “unequal” scale than most places in the country. On average, the report says, the poor in the U.S. pay more than twice what the top 1 percent pay in taxes, at a rate of 10.9 percent to 5.4 percent.
What causes this kind of thing to happen? Largely it’s due to taxes that specifically target poor and lower-class families who don’t have the pull in political arenas like the top 1 percent. As an example, recently a bill was proposed in the Oregon Legislature that would charge a tax to anyone who drove a car older than 20 years. This would almost exclusively target poor, or lower-class, people who are driving what they can afford to drive. The fact these kinds of bills come up at all and are hilariously narrowly focused at the poor is an obvious failure by our Legislature.
Sometimes the taxes that poor people pay aren’t even taxes. There are countless articles, studies and papers that refer to state- and federal-sponsored lotteries as being another kind of tax on the poor. If you look at counties and areas of major cities that are buying the most lottery tickets, they are almost always the poorest areas. A recent poll taken by Garrick Blalock, associate professor at Cornell University, shows that poor people are 25 percent more likely to play the lotto for money rather than for entertainment as it’s supposed to be, compared to middle- and upper-class players.
So, if you consider that Oregon taxes the poor more than anyone and that the majority of Oregon’s budget is funded from income taxes and the state lottery and only roughly 7 percent by business taxes, Oregon largely runs off the hard work, sweat, and tears of the poor.
There is something very wrong with a system that taxes the poor to where they are paying a higher percentage than the wealthy. We also need to take a closer look at where this money comes from, because if a large part goes into helping the poor, we are just maintaining a circle.
Another world leader, Winston Churchill gave us a good way to think about taxes.
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift it by the handle.”