Yup, the poor are taxed. Well in America, by law it seems that anyone making more than $30,000 a year is considered rich with anyone making less than $20,000 being poor (I have no idea what the in between is, this is the federal governments definition, not mine). What needs to happen is a regressive tax system that allows the poor more economic opportunities. So here is my solution, don't tax them!
The taxed poor: Every year at the federal and the State levels of government the poor are taxed on their income. Further, the State and the local government may also tax them on their property. Usually they get some of this money back in the form of welfare which I find ridiculous. If you are just going to give them the money back (though not always as money and even then it may be less than what they were taxed on) then why take it from them in the first place. Essentially why the heck are you impoverishing them further and limiting their economic options.
My idea: I steal this idea from the progressives (people who believe in one of the many forms of socialism) from the early 1900s. They (including President Woodrow Wilson) only taxed the top income earners in the country when they pushed for the 16th Amendment to the United States Constitution which allowed for direct taxation on individuals. For their purposes, only the top one percent was initially taxed to make things “fairer” (later on everyone was taxed). But for my purposes of removing direct taxation we would not tax anyone making under $30,000. With $30,000 being considered rich, it is an acceptable number at which to designate the threshold of what amount of income is taxed. This allows for regressive taxation at the mid between of the poverty line and below. As such, the poor would be able to earn more money without fear of reprisal of the tax code. Right now, many of the poor fear going over the poverty line because their welfare will be cut off. This decreases any incentive to work. But if they could keep more money in their pocket to the point that they make more money than they would have gotten under welfare, it incentivizes them to get out of poverty. This also reduces the number of people who need welfare as only the most desperate and impoverished will need some form of aid. So the only ones who would get welfare are a select group that absolutely need it most and that is only if they fall into a category where they cannot work do to a physical or psychological condition, or they are so impoverished that they are incapable of feeding themselves (or at least this is the goal with respect to not taxing the poor).
How it works: It is fairly simple. For one, anyone making under the $30,000 mark will not be taxed (adjusted each year for inflation). People will still need to file taxes each year to demonstrate how much they are earning per year however. If they go over the limit, rather than a tax based on the progressive income tax, they will pay a flat rate fee regardless of how much they went over up to the first $40,000. In this case I would have that fee be $2,000 with an entire year given to them to raise that money to pay it (even if it is in installments). This insures that if they for any reason made that extra money, they will not be taxed back down into poverty. To ensure there is an incentive to go even further up the income ladder, if the person makes over $40,000 to $50,000 they will only be taxed $4,000. Thus this eliminates much of the issues with respect to transitioning out of poverty and the welfare cycle and into earning ones own living. After the $50,000 mark however, the regular progressive income tax kicks in once again.
Weaknesses: This idea may still suffer from the issues of dependency. People may still require welfare do to them not wanting to work, and the idea I propose may still have disincentives to get out of poverty. My plan does however give a major tax break to anyone making less than $50,000 a year which is good for a majority of people and helps out the more economically capable of the poor in getting out of poverty. It unfortunately does not completely remove the need for certain people on welfare. While yes there are a good number of people on welfare that if they were not taxed, then they would not need welfare to live comfortably. However, there are still individuals who will lack means of getting out of poverty whether it is due to education, job loss, physical/mental ailments or just stigma from say prison time or other similar factors. Much of that can be handled by special programs that provide unemployment benefits combined with job training and education opportunities. Unfortunately, people will still slip through the cracks and be stuck on welfare such as the most disabled physically and mentally or those who cannot overcome the stigma society places on them. But, my idea is made to help the majority of the people so that they are not forced into the welfare office in the first place. In short, it is so that the only welfare required would be those for the unemployed and those completely unable to take care of themselves.
Conclusion: So this idea is about more than not taxing the poor, but giving them the opportunity to get out of poverty and the stigma it places on them by society. It is designed to be regressive at the lowest income levels so that people have a chance to make and keep more of what they earn. The more they keep, the less likely they will need any form of government assistance. So why don't we quit taking money from the poor just to give them less money back or the equivalent in lower quality support. Let them keep all of what they earn and only help those at the lowest of the low. That is the way to raise people out of poverty and get them off welfare, hopefully for good.
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