Party of the Rich?

Some Presidential candidates talk about helping the poor, the impoverished, and making sure the working family has a fair shake, but do they practice what they preach? Or are they in fact doing the opposite?

Recent legislative proposals from the majority party in Congress, such as the State Children’s Health Insurance Plan (SCHIP), a dedicated bridge fund, and legislation to address issues of climate change are bills that are built on funding mechanisms that keep the rich rich, and the poor poor.

The three main Democratic candidates for President devote large segments of their campaign speeches to how, if elected, they will help the poor and working class families of America. Hillary Clinton recently said, ”Let’s ensure that people who work hard every day can support their families and save for the future...”; Barack Obama recently said, “We've got a shift in our tax values that disproportionately benefits the wealthiest Americans”; John Edwards asserts that “it's time to restore fairness to a tax code.”

With those beliefs and priorities in mind, the next step would be to introduce bills and fight for legislation that eases the tax burden on the poorest Americans.

However, the current majority, including these candidates, are fighting for measures that disproportionately affect the poor in negative ways. These include excise taxes—like the tobacco taxes--proposed to fund SCHIP; gas taxes—proposed to fund bridge maintenance; and a carbon tax-- to fight climate change. These taxes are all regressive.

Excise taxes disproportionately affect the poor for several reasons. A report from the Congressional Research Service states “because consumption is a higher proportion of income for lower-income persons than upper-income individuals, excise taxes are usually considered regressive.”

In fact, according to the National Center for Policy Analysis, Americans that earn $24,000 or less spend almost 5% of their income on gas, while families that earn over $100,000 spend only 2% of their income on gas.

Furthermore, politicians understand the regressive nature of excise taxes. In 1962, excise taxes accounted for 12.5% of gross federal revenue. Since then, politicians have attacked regressive excise taxes and restricted their use. Today excise taxes only account for about 1% of the gross federal revenues.

In fact, excise taxes are an ineffective way to solve a problem. They create more inequality in the tax code, hurting American families. And these excise taxes enable the rich to get richer while the poor get poorer. This inconsistency means one of two things; at best they mean well but are shallow thinkers, or at worst they are knowingly pulling the wool over voters’ eyes. Interestingly, Democrats don’t seem to get it and continue to vote for legislation that increases the burden on the poor.

Recently, a vote on SCHIP bill garnered 67 votes in the Senate and 265 votes in the House. On this bill, Democrats claimed that the vote for SCHIP, which is intended to provide healthcare for uninsured poor children, outweighed the negatives of the tax burden on the poor. They failed to mention then and continue to skip the fact that besides the increased fiscal burden on the poor the legislation will now cover middle class children that already have private coverage while neglecting the poorest children that the legislation was originally intended to cover.

Democrats get elected by promising to help the poor, and then they tax the poor further into poverty. It is like holding somebody underwater and telling him to breathe. It doesn’t work, and voters should call for an end to this chicanery.

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