In the state of Alabama today, one of the most important sources of revenue for state and local governments is a tax that can be as high as 12 percent on food for home consumption. Those who can least afford it face a heavy burden for the very staff of life. Food taxes push poor people in exactly the direction they should avoid at all costs: low quality but inexpensive diets that increase obesity and imperil their health. How did Alabama come to rely on such a regressive tax policy? Why do the other states of the old Confederacy look...

The legacy of the past—southern opposition to property taxation in the nineteenth century—continues to define the disparities in tax structure and revenue we experience today. Inertia alone leads to the persistence of an underfunded public sector. Politicians are limited in their ability to implement marginal increases in taxes; therefore states starting with the lowest levels of taxation remain at the bottom. But this is not the only way the past haunts the present. Powerful statutory limitations intervene to make it exceptionally hard to change the situation.

Proposition 13, the notorious Jarvis-Gann amendment that rolled back property taxes in...

Alicia Smith lives in a single-wide trailer at the foot of a dirt road so obscure that we could not find it on any map of the region west of Montgomery, Alabama. It took nearly forty minutes to drive from the main highway to Snow Hill, the landmark nearest to Alicia’s home. Roads in this part of Alabama are shrouded in thick trees, dripping with Spanish moss. A few houses are visible from the road, but mostly the land is overgrown with vines and shrubs, with the occasional open meadow in the distance. We drove up a long, winding road...

The regional concentration of poverty poses serious problems for the whole country. But it remains for us to show that state tax codes bear any responsibility for the situation. Are high taxes on the poor related to social problems like excess mortality, out-of-wedlock childbearing, crime, and low educational attainment? In this chapter we answer in the affirmative: controlling for a host of competing possibilities (the racial composition of each state, patterns of state spending, proportions of the state population below the poverty line, and so forth), tax liabilities assessed on poor households are related to state-level mortality, high school completion,...

It is rare in the history of public policy to find examples of profound, progressive change in the financial fortunes of low-income Americans. The New Deal represents a clear triumph: public employment programs in the early 1930s shoved unemployment down from 25 percent in 1935 to 13 percent by 1936, rescuing millions of families from destitution. Social Security broke what had been a durable link between old age and poverty, ensuring that the country’s elderly population would live out its sunset years at a level of comfort that, though not luxurious by any means, was a major improvement. Who would...

When the West German state threw in its lot with its Eastern cousin, it embraced a common heritage. An enormous fiscal cost was shouldered in the name of that unity. And while some voices counseled against it, the unification of Germany was a long-hoped-for dream for millions. Americans recognize the same kind of commitment to the people who inhabit the many regions of our country. We fought a civil war over the question of unity, and if there was any resolution to come out of it—as President Lincoln reminded his contemporaries in his most memorable speeches—it was that...