Baltimore Books

Katherine S. Newman writes about poor people. The Dean of the Krieger School of Arts and Sciences at Hopkins wrote about the inner-city working poor in No Shame in My Game (Vintage, 2000), Chutes and Ladders (Harvard University Press, 2008), and A Different Shade of Gray (The New Press, 2006); those just above the poverty line in The Missing Class (Beacon Press, 2008) with Victor Tan Chen; and the once-affluent, newly-poor in Falling From Grace (University of California, 1999). She looks at their plight from a multitude of angles. In her most recent book (until January 17, when The Accordion Family comes out), Taxing the Poor (University of California, 2011), she and co-author Rourke O’Brien examine how higher state income taxes and sales tax on necessary purchases such as food, medicine, and clothing are related to social ills such as property crime, imprisonment, teen parenthood, early mortality, and lack of education.

Newman and O’Brien focus on the Southern states, where sales tax, rather than property tax, has historically been the main base of revenue. Long-standing fiscal practice dating to the Reconstruction era has made it almost impossible for a Southern state legislature, even a liberal one with a liberal governor (eg, Bill Clinton in Arkansas), to raise property or corporate taxes.

Sales taxes, especially those on take-home food, hit the economically disadvantaged harder than those in higher income brackets because the taxes take a larger percentage of already smaller budgets. Taxing the Poor theorizes that this leads to negative results such as less healthy food selections when shopping because “carbohydrates and fatty foods are relatively cheap, as well as filling. When food taxes are levied on top of the basic cost of food, we can expect to see poor families substituting lower-cost food for the more healthful but pricier market basket. This may be one of the routes by which the tax burden on the poor ends up affecting mortality.” I would guess that lower-income families would buy more non-healthful food with more money because food choices are culturally and socially determined, but the rest of Taxing the Poor is persuasively argued. The poor get the short end of the stick coming and going: they pay more in than their counterparts in other areas of the country, and they get less out in the form of “a poorly funded educational system” over generations.

Additionally, Southern states do not provide the large income tax refund to the poor that many Northeastern and Midwestern states do, so Southern families in the lowest income brackets end up paying even more in their total tax bill (income tax plus sales taxes) than similar families in other parts of the country. Newman and O’Brien use clear charts and maps of the United States to show that poor families in Southern and some Western states pay more in taxes. Then, controlling for other factors such as race, poverty rate, unemployment rate, individual state economic health, state expenditures, and federal revenue, they use graphs to show how the South suffers a greater variety of social ills, particularly increased mortality and higher property crime and violent crime rates. They acknowledge that there’s not much of a change in the rates of high school graduation or teen motherhood in areas with higher taxes, but that even with the small change, there are fewer high school graduates and more teen mothers when there are higher taxes.

“Money matters,” the authors point out, “The impact of taxation is to deprive the poor of resources they would otherwise be able to spend” on healthier food, medication, and better housing in better neighborhoods.

The authors go on to show that all U.S. citizens pay when one region of the country can’t support itself. Taxing the citizens least able to pay tax doesn’t produce enough revenue, so Southern states rely more on federal expenditures, receiving more in federal grants than it makes to the government in contributions.

For an academic book on taxes, Taxing the Poor is surprisingly clear, direct, and understandable. More examples of families facing these issues would have been interesting, though could have pushed the book more into Barbara Ehrenreich Nickel and Dimed territory. Ehrenreich supplies the anecdotes; Newman and O’Brien supply the facts and figures and an examination of how very specific and reversible policies hurt the poor.