Everywhere we see that Wilkinson’s book The Spirit Level applies; one of these studies points to regressive taxes as indicators of inequality and their higher associated costs: The NYT published an article about it: In the South and West, a Tax on Being Poor, and one of the paragraphs sums it succinctly:
For every $100 increase on taxes at the poverty line, we saw an additional 7 deaths and 78 property crimes per 100,000 people, and a quarter of a percentage point decrease in high school completion.
The taxes tell part of the story, but as with other indicators, they are only a glimpse into a system that skews towards affluent minority, while eliminating the social safety net and penalizing the lower percentiles in ways that eliminate mobility, increase morbidity and places additional costs on the social group.
Early on we were having discussion on the social contract, and how the perception of that contract allows people, constituents, to express their concerns and have actual results in a decent time frame, thus diminishing the pain that misguided policies might inflict. However, when the contract emphasizes the individual right over the social one, we see issues such as the ones presented in the NYT article.
Austerity has long proven to be an ineffectual tool, and the policies resulting on measures that resemble that are painful, regressive and costly.