The factors that drive poverty are numerous.

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One factor that has a big impact on poverty is taxes.

Specifically, the cutting of taxes can lead to increased prosperity and individual wealth. When tax rates were cut dramatically in the 1920s, a change from 70 percent to less than 25 percent, we saw huge benefits.

Both the individual and the state prospered. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent. More money was left to the individual, which increased their quality of life.

According to then-Treasury Secretary Andrew Mellon: The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

Cutting taxes also provides two more big benefits. Small government means more individual generosity. The higher the percentage of income that individuals keep the higher percentage they give. And individual generosity tends to be more effective at providing aid than government aid.

We see this play out historically in the example of the New Deal. Private charity spending “fell by 30% in response to the New Deal”

Overall, we see large benefits when individuals are given more freedom. This principle also holds true in regards to taxes. When people have more say over what they do with their money they can increase their quality of life or help the greater good.