DP
—And it’s not just sales taxes that are regressive, either. Here’s a list of other stuff that poor people pay a greater percentage of their income for:
- Lattés (4.9% for poor people vs. 0.01% for rich people)
- Cell Phones (10.2% vs. 0.07%)
- Rent-to-Own Furniture (13.1% vs. 0.0%)
- Lottery Tickets (7.3% vs. 0.0%)
- Payday Loans (11.4% vs. 0.0%)
- Self-help Books (6.0% vs. 0.0%)
Where did I get these figures? I made them up of course. Still, for all of these items I’m quite sure the poor do spend a greater percentage of their income than do the rich. But so what? Does the fact that poor people pay a greater share of their income for lattés mean that they’re paying more than their fair share for lattés?
—No. It does not.
Looking at tax as a percentage of income alone is not necessarily the best way to assess the fairness of the tax structure. If you’re going to judge fairness according to, “Who pays the greatest share?” then shouldn’t you also ask, “Who gets the greatest return on their tax dollar?” If you look at it that way, you would have to say that, in fact, middle class people get the best deal, simply because, as the largest group, they are bound to receive the largest share of public services paid for by tax dollars, even though they do not pay the lion’s share of the tax.
At some point in the debate about what’s fair you also have to ask what’s a fair wage for people to get paid for different kinds of work. Is Bill Gates paid fairly for what he does? What about the people who clean his house? Or houses, as the case may be.
Something tells me we’re not ready to have that debate just yet. Still, I’m glad people are starting to think more about the question of fairness, because it’s important.