Hi 77 / Lo 61
|Volume 68, Issue 137,
Monday, April 21, 2003
Equal taxes for rich and poor
If you are a student, you will be facing much higher fees next year, and most probably, much higher tuition. If you are employed here, you now know that your health benefits will be significantly more expensive than last year.
But donit worry, the leadership of the Texas legislature assures us that there will be no new taxes. Thatis certainly a relief. Why, new taxes would be money out of our pockets that the state would just squander on programs like, letis see, higher education and health care maybe ... I hope you get the point.
Usage fees for public goods that everyone is entitled to are simply taxes by another name. For some, it doesnit matter that lots of working people and their children will no longer be able to afford to attend UH, or that even more of our full-time employees will become eligible for food stamps.
The important thing is not to raise taxes and stifle the private initiative that is the backbone of our economy.
I wonit argue which perspective is right here, but letis look at who actually pays the taxes in Texas. Texas makes use of sales taxes as its primary source of income, and poor people spend a higher proportion of their income on taxable items. As a result of this, the poorest 20 percent of the population pays 11.4 percent its average income of $9,300 in taxes, while the richest 1 percent pays 3.2 percent its average income of $1,000,000. Thatis a factor of more than three, and it makes Texas the state with the fifth-most regressive tax system in the country.
Perhaps thatis as it should be. We donit want to penalize success, after all. But if we had a flat tax rate of 11.4 percent for everyone, then the state would have an additional 60 billion dollars in its coffers, a 50 percent increase from the projected budget.
If we only taxed the wealthiest 5 percent of the population at 6.4 percent we would raise the state budget by 8 billion dollars, or 80 percent of the present state deficit. And then we wouldnit have to remove children from the Children's Health Insurance Program, or cut back on health care benefits for state employees and K-12 teachers, or price higher education out of the reach of larger numbers of people.
But then, stifling those peopleis initiative doesnit really matter to Congress or to the wealthy contributors who helped get them there.
Reiter, a professor of physics, can be reached via email@example.com.
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