June 22, 2007

Taxing and spending yield more poverty, not less

Generally, the rationale for high taxes and high governmental spending is the redistribution of wealth and the alleviating poverty. It would follow, one would think, that states with steep taxes and more governmental spending would have lower poverty rates. But as reported in the print edition--I couldn't find it online--of Reason Magazine the opposite is true.According to statistics from the Digest of Education Statistics, between 1990 and 2000--and despite a national economic boom--the ten states with the highest governmental spending saw a 7.6% increase in poverty. Moreover, the ten highest taxing states had poverty increase by about 2%.Meanwhile, the ten stingiest states when it came to governmental spending, dropped their poverty rates by about 8% over the same period of time. What about state with the lowest taxes? Good news there too: Those states dropped poverty marks by nearly 10% on average.Is this correlation just a coincidence? I doubt it, but I'm sure the proverbial tax and spend liberal certainly hopes so.