Against Poverty? Then It’s Time To Cut Taxes
In the Christian Science Monitor, Matthew Ladner writes that the key to lower levels of poverty is lower taxes:
A study published last month by the Goldwater Institute, “How to Win the War on Poverty: An Analysis of State Poverty Trends,” tests these different theories by examining state poverty rates from 1990 to 2000.
Nationwide, states took great strides in reducing both general and childhood poverty. Poverty fell by 5.3 percent and childhood poverty by 9.4 percent. Some states, however, reduced poverty much more than others, while some states suffered large increases.
Take Colorado. It reduced its childhood poverty rate by almost 27 percent. Meanwhile, Rhode Island’s childhood poverty rate increased by almost the same amount. What accounts for those differences?
Using data from the Census Bureau, the report found that states with the lowest tax rates enjoyed sizable decreases in poverty. For example, the 10 states with the lowest total state and local tax burdens saw an average poverty reduction of 13 percent – two times better than the national average. The 10 highest-tax states, meanwhile, suffered an average increase in poverty of 3 percent.
Some high-tax states, such as California, Hawaii, and New York, suffered catastrophic increases in poverty. As California began to reject the low-tax legacy of the Reagan governorship, the state’s poverty rate jumped 13 percent in the 1990s.
The connection, of course, is clear. Lower tax rates leader to greater economic growth, which leads to more job opportunities at all levels of the economy. The Democrats will be taking over Congress next month, and have already vowed to roll-back the Bush tax cuts, the one thing the GOP did in the past six years that actually helped the country. If they really cared about the poor, they’d keep them in place and encourage states like California, New York, and Hawaii to follow suit.
