A big H/T goes out to Chicago Ray for this article.
10 Ways Government Hurts the Poor
by Jerry Agar
"If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life." Henry David Thoreau
"I am from the government, I am here to help you." Scary Bureaucrat
In no particular order, and in my opinion, here are 10 ways the government does the opposite of its announced intentions.
1. Minimum Wage If you charge more for something, you sell less of it. Labor is no different than any other commodity for sale. As economist Walter Williams says, "If higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages." A higher minimum wage means fewer jobs and makes it more difficult for people to start a small business. If you tell me you'll pay me X dollars an hour to do a job, and I say, "That's fine," why shouldn't I be allowed to do so? Why not just declare that everyone has to earn at least $100,000 a year? The answer is no different at $100,000 than it is at $15,000. It is just a matter of scale.
2. Taxes Business taxes are built into a product at a number of levels along the production and distribution chain, and then sales tax is added at the end. An ever-increasing government can appear to fund its growth by “taxing the rich” and to make business “pay their fair share,” but low income consumers pay a higher percentage of their total income in taxes. All products and services include taxes even when it is not obvious. For instance, rent contains property tax. Gasoline is highly taxed, but the actual tax rate is not listed at the pump.
3. Over-Regulating Over-regulating of business costs money for those enterprises that survive. Less money - less employment. Over-regulation leaves so many hoops to jump through that it distracts from the aim of the business or company, and thusly hurts expansion. Plus, it makes it all the more daunting to start a business Wasting money on losing propositions like sports stadiums - which are always sold to the public as economic development - takes money out of the economy, which ultimately costs jobs.
4. Health Insurance The law denying the right of people to buy health insurance across state lines results in less competition which means higher prices. Mandated coverage forces us to buy insurance we don't need. As economist Thomas Sowell points out, "Mandated coverages include alcoholism, acupuncture, breast reduction and treatment for baldness, among other things. You may just want insurance to cover you in case you get hit with some big-time medical problem, but many state laws will not allow an insurance company to sell you "major medical" coverage without all the add-ons that politicians and special interests have come up with." Does a single mother struggling to make ends meet, yet wanting to protect the well being of her children, really need to pay for baldness coverage (pun intended) in her health plan?
5. Unions Governments often work in favor of unions to the detriment of taxpayers in general and the poor in particular. Two examples are prevailing wage laws and the fight to keep Wal-Mart out of Chicago. Unions today primarily survive in the public sector, driving up the cost of government, which lowers the efficiency of the economy and its ability to create jobs.
6. Education Monopoly - the cap on charter schools and the unwillingness of so many government entities to give power to parents through a voucher system keeps the monopoly going. In Chicago the graduation rate is 50%, but the education monopoly will not even consider trying capitalism, now that socialism has failed. Monopolies never favor the customer – in this case the children of people too poor to escape bad schools.