You know how it works – you go to work and earn money, then the government gets their cut. The federal government gets some, and, in most states, the state does as well. That funds the different services they provide.
The idea of taxation is nothing new. In fact, taxes are a necessary part of a functioning society that has shared public services. Whether it comes through income tax or if it comes through other taxes like sales, corporate, property, or import taxes, we all know what taxes are being levied and have the opportunity to weigh in on them through elections and other political measures. This goes back to the battle cry of our forefathers – there should be no taxation without some form of representation.
Unfortunately, there is a tax that is growing right now that disproportionately affects lower-income families. The invisible tax of inflation has had crippling effects on lower-income households across the country.
Inflation – the hidden tax
As of November 2022, the cost of consumer goods was up by 7.1 percent. In certain areas, like rent, groceries and medical expenses, the percentage jump is even higher. Of course, inflation hurts everybody, but when basics like groceries and gas make up a larger percentage of a family’s overall budget, inflation has a greater effect.
Although inflation has remained stagnant since November of last year, it is still high. The cost of rent continues to rise, disproportionately hurting lower-income families. And all of this is to pay for the influx of cash pumped into the economy during the COVID-19 pandemic.
Economic stimulus programs like the PPP loan, child tax credits, unemployment payments along with supply chain delays and business shutdowns, put more cash into the economy than the supply could support. And now, like a bad loan, lower-income communities are paying the interest on that cash with every rent payment, grocery run, and tank of gas they buy.
Fight inflation to help the most vulnerable
Right now, we find ourselves at a crossroads – continue on our path and hurt lower-income families or do the hard work to fight inflation for the sake of our most vulnerable communities. Recent rhetoric claims that fighting inflation is a top priority, but inflation is still high and the recent rate hikes may not pay off for a while.
Let’s make sure we know when we’re being taxed, by how much – and that it isn’t a burden that is going to permanently hurt any American families.