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Taxes, Income Inequality, and Asshole Lawmakers

This week's episode of NOW, PBS's weekly half-hour newsmagazine, focuses on how restrictive tax codes can factor into income inequality. This issue, depending as it does o numbers and statistics, can be pretty hard to wrap your brain around. It's not something that lends itself to sound bytes or campaign slogans, so the MSM rarely talks about it; thus, most (myself included) don't really understand how patently unfair many states' tax laws are, and how they are actively preventing people from bringing themselves up out of poverty.

But by focusing on Alabama, which turns out to have one of the most regressive tax codes in the country, and demonstrating how the taxes affect different incomes groups, the show does a really good job of laying out the issues. And it also points out clearly how lawmakers in Alabama know exactly what's going on -- they know how the tax system is unfairly targeting the state's poorest citizens -- and many of them want to keep it that way. Because if you don't tax businesses, and you don't tax the wealthy, your money has to come from somewhere! And if you're going to put the tax burden on the poor, you have to make that burden heavy enough to keep them poor so you have a guaranteed source of income. Don't believe me, that legislators could be so utterly heartless? Read on.

Currently, Alabama's state tax code allows taxpayers to deduct the amount they pay in federal income taxes from their state income taxes (which are assessed at a nearly flat rate). Since the federal system puts a higher burden on the wealthy, this state law is more beneficial the wealthier you are. (That is, a poor person might only pay a tiny amount to the federal government, so they have to pay the full amount of their state income tax, while a wealthy person who gives a sizable chunk to the federal government gets to subtract that from what they pay the state, which would then turn out to be very little; the effect is that the state makes its money off its poorest citizens.) Democrats in the state legislature have put forth a bill that would get rid of this regressive tax, and it's up for voting this Tuesday (yeah, April 15... cute). The show interviews community groups who have lobbied for the bill, wealthier citizens who favor the bill (recognizing that they shouldn't have to pay less because they make more)... and this state legislator, who plans to vote against it (ie, he is in favor of the status quo):

Amazing, but true.

You can watch the whole episode of NOW on its website, which also has a state-by-state analysis of income inequality and other supplemental material. To learn even more, and find how to become active in the fight for fairer tax codes, check out the Center on Budget & Policy Priorities. I have to admit that before seeing this show I didn't know much about this issue, but I'm going to make an effort now to educate myself on it and to support organizations that are trying to fight income inequality and have solid plans for doing so. (Not electing assholes like the guy above is a good start!)