The conservative economist in California argues that income taxes aren’t the only way for the government to take your money, even for poor folks: "Despite all the political rhetoric today about how taxes won’t be raised except on 'the rich,' inflation transfers a percentage of everybody’s wealth to a government that expands the money supply. Moreover, inflation takes the same percentage from the poorest person in the country as it does from the richest. That’s not all. Income taxes only transfer money from your current income to the government, but they do not touch whatever money you may have saved over the years. With inflation, the government takes the same cut out of both."
Dr. Sowell continues: "The biggest and most deadly 'tax' rate on the poor comes from a loss of various welfare-state benefits — food stamps, housing subsidies, and the like — if their income goes up. Someone who is trying to climb out of poverty by working their way up can easily reach a point where a $10,000 increase in pay can cost them $15,000 in lost benefits that they no longer qualify for. That amounts to a marginal tax rate of 150 percent — far more than millionaires pay. Some government policies help some people at the expense of other people. But some policies can hurt welfare recipients, the taxpayers, and others, all at the same time, although in different ways."