The Taxation Disconnect

Walter Williams makes some of the same points as this post yesterday:

The fact that there are so many American earners who have little or no financial stake in our country poses a serious political problem. The Tax Foundation estimates that 41 percent of whites, 56 percent of blacks, 59 percent of American Indian and Aleut Eskimo and 40 percent Asian and Pacific Islanders had no 2004 federal income tax liability. The study concluded, "When all of the dependents of these income-producing households are counted, there are roughly 122 million Americans -- 44 percent of the U.S. population -- who are outside of the federal income tax system." These people represent a natural constituency for big-spending politicians. In other words, if you have little or no financial stake in America, what do you care about the cost of massive federal spending programs?

Similarly, what do you care about tax cuts if you're paying little or no taxes? In fact, you might be openly hostile toward tax cuts out of fear that they might lead to reductions in handout programs from which you benefit. Survey polls have confirmed this. According to The Harris Poll taken in June 2003, 51 percent of Democrats thought the tax cuts enacted by Congress were a bad thing while 16 percent of Republicans thought so. Among Democrats, 67 percent thought the tax cuts were unfair while 32 percent of Republicans thought so. When asked whether the $350 billion tax cut package will help your family finances, 59 percent of those surveyed said no and 35 percent said yes.

Not good.