The Poor Tax

"This change does not affect you!...Wait, what's that? You care what happens to people who aren't you?...Why?


“Our bank has a poor tax now,” was Jordan’s observation as we got this notice from Chase.  And so it has:  It now fines people who don’t have enough money.  Checking is free if you have at least $1500 or make a monthly direct deposit of $500 or more.  Otherwise, it’s a $10 a month fee.

Wait, what?  So if you don’t have enough money…they charge you money?  Thus ensuring that you will continue to not have money, so that they can continue to charge you money?  Why not just bring back debtor’s prisons and have done with it?

It’s true that, assuming that they need more money and absolutely need to earn it by charging fees and not by, say, loaning money and making financial investments like a freaking bank, then yes, they have to do something like this, because they couldn’t charge you for putting too much money in the bank.

Oh wait, they earned $11.7 billion in profits last year.  So they’re just being pricks.

They’re also shooting themselves in the foot in the long run, since they’re helping to create a class of people in abject, inescapable poverty.  These people will never take out mortgages or make investments or any of the things that actually earn banks money.  They’re also helping grind economic recovery to a halt, since what kind of person has no monthly deposits and can’t keep a minimum balance?  The unemployed.  But Chase is willing to accept all that for the chance to take $10 a month from people who don’t have $10 a month.

But enough from me.  Someone else has a few choice words for Chase and the other banks:

Behold, the pay of the laborers who mowed your fields, and which has been withheld by you, cries out against you; and the outcry of those who did the harvesting has reached the ears of the Lord of Sabaoth.  (James 5:4)

You shall not be partial to the poor nor defer to the great, but you are to judge your neighbor fairly.  (Leviticus 19:22)

But your eyes and your heart are intent only upon your own dishonest gain, and shedding innocent blood and on practicing oppression and extortion.  (Jeremiah 22:17)

There is a kind of man whose teeth are like swords and his jaw teeth like knives, to devour the afflicted from the earth and the needy from among men.  (Proverbs 30:31)

For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.  (1 Timothy 6:10)

Woe to those who scheme iniquity, who work out evil in their beds!  When morning comes, they do it, for it is in the power of their hands.  They covet fields and seize them, and houses, and take them away.  They rob a man and his house, a man and his inheritance.  (Micah 2:1-2)

Hear this, you who trample the needy, to do away with the humble of the land, saying “When will the new moon be over, so that we may sell grain, and the sabbath, so that we may open the wheat market, to make the bushel smaller and the shekel bigger, and to cheat with dishonest scales, so as to buy the helpless for money and the needy for a pair of sandals, and that we may sell the refuse of the wheat?”  (Amos 8:4-6)

On garments taken as pledges they stretch out beside every altar, and in the house of their God they drink the wine of those who have been fined.  (Amos 2:8)

Therefore because you impose heavy rent on the poor and exact a tribute of grain from them, though you have built houses of well-hewn stone, yet you will not live in them; you have planted pleasant vineyards, yet you will not drink their wine.  For I know your transgressions are many and your sins are great, you who distress the righteous and accept bribes and turn aside the poor in the gate.  (Amos 5:11-12)

And basically the rest of Amos.  Alas, I don’t think we’re actually going to see anyone get dragged with a meat hook.  This is, however, a great illustration of why we can and should tax the crap out of the rich:  Because the inherent structure of our society already fines the crap out of the poor.  Just reaching the point where poor people are able to keep all the money that they earn, let alone gain interest on it, would be an advance.

In conclusion, can anyone recommend a good credit union in the Pasadena area?



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10 responses to “The Poor Tax

  1. Bryce Laliberte

    Hurting someone just because someone else is hurt is not sound, economically or morally. Heavily taxing the rich derives nominally better tax revenues while also driving down the amount of investments in business the rich would otherwise do.

    I don’t have any comment on the $10 fee by Chase. However, one of the ways to avoid this fee is to make at least one $500+ deposit per month. Working minimum wage 40 hours a week nets $580 before income tax. So, as long as they’re working…

    • Jordan

      Don’t you see, that’s exactly the point. The steadily employed full-time workers will avoid paying this fee. The unemployed or part-time workers (even those with two part-time jobs, say) will most likely have to pay the fee. This is by design, so as to penalize the bank’s less fortunate customers and allow them to still provide free checking seamlessly for the better-off.

      On taxing the rich and poor differently: when poor people get money, they can’t help but spend it and put it right back into the economy; when rich people get money, they hire CPAs and try to avoid paying taxes on it – and nobody gains but themselves.

      At least you acknowledge that higher taxes on the wealthy *does* increase tax revenue; some conservatives try to argue that revenue stays the same or even decreases, which has not been the case historically.

    • katz

      Do I have to reprint this graph again?

      You are blaming the people 10 million more people than job openings for not getting a job. This is called vilification of the poor. It’s bad. Don’t do it.

  2. Bryce Laliberte


    Yes, I acknowledge that a straight tax on the rich’s income would bring in *nominally* better tax revenues, but I’m also pointing out that this drives down the amount of investment in private business that would otherwise happen. The “better” tax revenues that we would have at first come at the expense of wealth in the economy and jobs in the long run.


    I didn’t mean to imply a vilification of the poor. I see I was unclear, so allow me to clarify.

    There should be more jobs, I absolutely agree. There aren’t enough jobs, that’s why there are so many unemployed. However, the way to help these jobs to be created is not by government solution, because the government cannot create wealth. At best, it can give incentives for certain behavior, but these incentives the government makes will always have tradeoffs.

    For instance, consider the stimulus package that was supposed to create a lot of jobs. This did, in fact, happen, but in a terrible way for two primary reasons; 1) each job “created” or “saved” cost on average $400,000, and 2) the jobs “created” and “saved” were temporary jobs that put people at work in projects that did not increase the wealth in the economy (and, by this, the need for long lasting employment). It was a quick fix that, after it was over, only helped the problem to last longer, as well as leaving us in an even greater amount of debt.

    • Joe Sullivan

      Do you have a reference for that $400k per job figure? It sounds kind of fishy to me. I don’t think they were taking $300k per job and burning it. If they are spending it, then it seems like that is serving the intended purpose, which is stimulating the economy….

  3. Bryce Laliberte

    Alright, I’ll bite on exaggerating a little bit; *some* jobs came at the cost of $400,000. Though there was not a single job saved at an effective price.

    Further, “just spending money” is not necessarily a good thing, and, can be a bad thing. The government, unlike private companies, has less reason to allocate funds effectively, because it doesn’t go out of business. First, any money the government spends must first be taken, or vowed to be taken, from the private sector, second, it must then be accounted for, and finally spent, and it will probably be spent on something different than what the private sector would spend it on. The government could hire men to just dig holes, but that’s not going to boost the economy. And when the government does spend or tweak incentives to increase spending in some sector, it leads to an over-allocation of funds to that sector (i.e. housing) which causes there to be too much investment in one area which is made up for in down-priced capital once the binge of spending can’t be sustained any further.

    • katz

      The article you linked to could reasonably be characterized as a “screed.” Furthermore, it doesn’t cite any sources either.

      An example of an actual source would be the Congressional Budget Office. They estimated 2-5 million jobs created back in August. But it’s scarcely relevant, since whether that particular bill did create jobs says next to nothing about whether the government can create jobs, which itself is scarcely relevant, because this post is not about job creation (if you’re so averse to government debt, perhaps we should have the people with huge pots of money help pay for it).

      Your assertion that the government doesn’t create (many) jobs rings hollow here in Pasadena, where one of the largest local employers is NASA’s Jet Propulsion Laboratory. It feeds on a steady stream of engineers from the (publicly-funded) Caltech and outputs an equally steady stream of research and intellectual property, much of it leading to startups and new technology in the private sector. Sometimes it seems like I’m the only person I know who doesn’t work there.

      Your assertion that the government cannot create wealth is, by contrast, provably untrue. Consider, for instance, the Hoover Dam. Built in 1931-36 for $49 million (according to The Wiki), it recoups this cost every five years in tourism alone. It provides 2 GW of power spread out over three states to power homes, offices, factories, and what have you, and water from the lake serves 8 million people and is widely used for agricultural irrigation. Are you going to step up and say that the Hoover Dam was a wealth-neutral enterprise?

    • Joe Sullivan

      Your example of digging holes is an interesting one because here in Seattle we take particular pleasure in digging large holes. But that is beside the point.

      The real question is whether we are better off with higher taxes and more government services, or more funds in the private sector. I think you can see the effect of different fiscal policies by looking at other countries.

      Belgium, Germany and France have the highest tax rates in the developed world. The US is relatively low, but Ireland is lower, and Mexico and Korea are lower still. So, how do these countries compare?

      Unemployment (lowest to highest): Korea, Mexico, Germany, Belgium, US, France, Ireland

      Life Expectancy (highest to lowest): France, Germany, Belgium, Ireland, Korea, US, Mexico

      Per Capita Income (highest to lowest): US, Ireland, Belgium, Germany, France, Korea, Mexico

      Environment (best to worst): France, Germany, Ireland, US, Mexico, Korea, Belgium

      Should the US model itself after, say, Ireland, where taxes are low, but the government is broke and employment is sky-high? Or Mexico or Korea, which have relatively low unemployment but people live in relative poverty?

      Or should the US model itself after the high tax countries, which all have a long life expectancy, and mostly are pretty good environmentally, unemployment-wise, and in terms of per-capita income?

      None of the low-tax countries look like places I would want to live, but the high-tax places don’t look too bad. Your belief that we would be better off leaving more money in the hands of private citizens I don’t think is supported by the data.

      • katz

        That’s the a posteriori argument. The a priori argument for the same thing is: Business has the goal of making a profit; that is, earning the most money while spending the least money. Thus, their ideal goal is to take everything from the economy and give nothing back.

        Government has the (at least nominal) goal of Making Stuff Work. Thus, their ideal goal would be to create law and order, safety, infrastructure, etc. while spending nothing. Impossible, obviously, but that’s why it’s an ideal.

        Therefore, even allowing a huge margin for government inefficiency, the government will still give back more per dollar spent than an equivalent private for-profit. Having both forces both to work better, of course; the question is where the balance should lie.

        (They’re not still punting the Alaskan Way Viaduct tunnel idea, are they?)

  4. Joe Sullivan

    People make arguments for everything from libertarianism to socialism. Public/private dynamics are so complicated that people seem to pick an ideology based more on faith than on data. That is why it is interesting to look at countries with different public/private mixes and ask, where would you rather live?

    Russia tried communism and Great Britain tried socialism for a while; both of those clearly failed. But at this point there is no indication that any of the countries with the highest tax rates in the world have gone too far. I think that means that the US could increase taxes by a lot without causing serious harm to the economy. On the other hand, cutting taxes potentially gets you into the problem that Ireland, Greece, and others have had…

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