Friday, May 29, 2009

The Poor Pay More, Too

By Gary L. Flowers

Executive Director & CEO

Black Leadership Forum, Inc.

May 22-31, 2009

Throughout United States history economic exploitation of the poor has been a constant. Whether it was the exploitation of Native Americans for food cultivation and military intelligence, or Africans in cotton fields, or Latinos in fruit fields, or Asians on the railroad, the poor have paid an extraordinary price of patriotism. In each case, it was not the work that was exploitive per se, but rather the lack of fair compensation, which has stained this nation’s honor.

Today, economic profiling by race, ethnicity and socioeconomic status is a reality. According to the United States Census, there are 37 million poor people (under the federal standard of $15,000 per household of 3) in America. Contrary to the American promise of equal protection under the law, the pigmented poor are targeted and taxed at a higher rate than affluent Americans. The poor still pay more.

I live in one of the last remaining sections of Capitol Hill in Washington, DC that is primarily African American in residences. Over the years I have noticed that two phenomenon: The poor are taxed as “have-nots”; while the more affluent are afforded lower prices as “haves.”

For example, the purchase of household goods such as food, paper products and trash bag has two realities: Those with money have more options to save money; those without must pay more. Due to the fact that nearly all middle class households have at least one automobile, they can drive to mega discount stores and buy in bulk, as they need to do so.

On the other hand, poor households do not own cars and either have to walk to the closest store or take public transportation. Not only does such usually cost more per item due to “pilfer” taxes (additional charges assessed in poor neighborhoods to offset the lost by theft), but the poor are limited by how many bags they can reasonably handle. By travel limitations and price exploitations, the not so poor are targeted by predators.

What differentiates the poor and the not so poor are typified by the possession of bank accounts and automobiles, which accounts for another set schemes. Yet, poor is poor.

The not so poor are exploited in their purchase of insurance, automobiles, and the use of money. Many insurance companies maintain “standard” and “premium” polices. Of course, “premium” policies cost more and are usually levied on the poor based on zip code. Likewise, if the poor make it to the car dealership they face another level of exploitation. Auto dealers are permitted to employ “discretionary financing” on questionable loans. However, the dealers determine when to exact the tax, based on “credit worthiness.”

Notwithstanding how the poor pay more for food, insurance, and automobiles, the most egregious exploitation of the poor has been the cost of money for the pigmented and the poor. After all, race, in addition to household income and credit worthiness, has led to the meltdown of the American economy. Predatory lenders targeted poor people of color (African American and Latino) with inflated loans (sub-prime) when many qualified for prime one. Predatory lenders—not unlike “loan sharks”—applied exorbitant fees and invented “loan swaps” to tax the poor. Most recently, the oxygen found in money is now being pumped to the poorer veins of America.

In particular, I was proud to witness President Obama sign new credit card legislation that will prohibit credit card companies from charging over 24% interest, raising interest rates on existing balances under 60 days notice. By signing the legislation, President Obama began the process of protecting the poor from being preyed upon.

If we are to be the nation we boast, why not help the poor get off of the floor first? The house America builds by protecting the poor will be on solid ground.

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