Thomas Edsall wrote a great article at The New York Times yesterday, The Expanding World of Poverty Capitalism. The base story is not exactly breaking news, but the situation only gets worse. Basically, we have a system where state and local governments don’t feel like they can raise taxes so they raise funds in ways that don’t require it. And these ways are highly regressive taxes by another name.
We have been seeing a perfect example of this in Ferguson. Last year, just over 20% of the city’s revenues came from court fines. This is almost double what it was just two years before. That’s money that comes almost exclusively from the poor. But the government can claim it isn’t a tax increase. And in a technical sense, it isn’t. But what it is is a system that is far worse. Another fun fact from our friendly Ferguson police department is that these fines are applied far more to blacks than whites.
But the issue is much bigger than this. The problem seems particularly bad in Georgia, but that is doubtless just because the innovations of this laboratory of democracy haven’t fully made it out. Rest assured: they are coming to a red state near you, and parts have already arrived. Of particular concern are private probation companies. Instead of the government paying for probation officers and all that, the poor souls caught up in the system are just sent to these private companies, which they must pay. According to Human Rights Watch, there is “virtually no transparency about the revenues” of these companies. The poor just pay and the government doesn’t care.
But the great thing about them is that if someone on probation isn’t able to pay the private company, the company can have them sent to jail. If this sounds like debtors’ prisons, that’s pretty much true. Think of Georgia as a pilot program. Of course, there have long been debtors’ prison type laws in the United States. In the simplest of cases, if people on supervised probation are not able to pay their fees they will go to prison. This is clearly wrong, as it would never happen to a rich person. But what’s new here is that private companies are using the criminal justice system to imprison people who don’t pay what the companies think they are owed.
I think it is fair to say that this only gets worse over time. And as more and more government functions get privatized, we will see more of this. And at some point, it will only seem natural that people go to jail when they can’t pay their debts to Citibank. And what’s this business about bankruptcy? After all, throughout my life it has gotten harder and harder to get bankruptcy. Even though that’s bad for the economy as a whole. It’s great for credit card companies and that’s all that matters!
The bigger issue here is that the political elite just get better and better at shifting the cost of government from the rich to the poor. I’ve argued for a long time that the rich may talk about a flat tax, but they would never be satisfied with it. As it is, total tax burden in this country is only slightly progressive. But what they want is a regressive tax system. It isn’t about fairness. It’s about power. And the rich have power and the poor don’t.
But let me leave you with Thomas Edsall’s hopeful words:
Perhaps. But the truth is that our political system is designed to make it as hard as possible for the poor to participate in our democracy. But I still have a little hope that we can overcome this.