Rich Man,Poor Man…

Let’s talk about welfare.

Usually, when you hear someone railing against “welfare cheats” and/or “encouraging dependency,” the objects of scorn are unwed mothers, people of color and other impoverished populations. The people who express these sentiments resent the use of their “hard-earned” tax dollars to help support people who are clearly unworthy.

There are a number of uncongenial facts that don’t influence those diatribes: the fact that our current social welfare system (if you can dignify it by calling it a “system”) is monumentally inadequate (most people who are struggling to put food on the table don’t qualify); a large percentage of those who do receive benefits are children, the disabled and the elderly; and– triggering my rant this morning– the most dependent and often unworthy beneficiaries are the rich.

A recent essay from Commondreams.org focuses on that last item, and details the ways in which wealthy Americans benefit from a wide array of tax breaks and government subsidies that somehow escape mention when Republicans complain about entitlements for the poor.

Those favorable provisions are often hidden in the tax code.The enormous stock market gains that investors have made since the end of 2008–estimated at some 30 trillion– can be held tax-free until the stocks are sold, and can also be passed virtually tax free by the super-rich to their children, who can take their inheritance subject to a so-called stepped-up provision which allows them to erase all the accumulated gains. In many instances, that means without paying a single dollar in taxes. As the author notes, “This massive subsidy for the super-rich, along with gift tax and estate tax loopholes, has allowed families like the Waltons to avoid paying their debt to society.”

Then there are what we euphemistically term “tax expenditures.”

Tax expenditures include mortgage deductions, interest and dividend exclusions, and reduced rates on capital gains. According to the Center on Budget and Policy Priorities, “the cost of all federal income tax expenditures was higher than Social Security, the combined cost of Medicare and Medicaid, or the cost of either defense or non-defense discretionary spending….These tax expenditures are ‘upside-down,’ providing their largest subsidies to high-income people even though these individuals are least likely to need financial incentives to engage in the activities that tax expenditures are generally designed to promote, such as buying a home, sending a child to college, or saving for retirement.

The total loss of tax revenue from just the mortgage and property tax deductions is nearly double the amount spent on public housing programs.

The Common Dreams article didn’t even mention the corporate subsidies I have so often criticized on this site: the subsidies for fossil fuels, payments to corporate farmers, and numerous, highly favorable tax provisions that allow corporations to evade taxes on huge profits, among many others.

Many of these provisions are defended as necessary to “incentivize” socially-useful activities, although research suggests that (with a few exceptions) there is very little evidence for that assertion, and in the case of those fossil fuel “incentives,” what we are incentivizing might more accurately be called “socially suicidal.”

Speaking of socially desirable activities, most Americans would include raising healthy well-adjusted children in that category. Making that task easier for poor families and/or single parents seems to me to be a better investment in the common good than incentivizing oil companies to locate new fossil fuel deposits.

But of course, poor people and single parents lack the means to hire lobbyists…

 

 

14 thoughts on “Rich Man,Poor Man…

  1. My ex girlfriend who lives in Arizona works for the DES department for the state. She processes applications for unemployment, Medicaid etc. she spends about 90% of her time making sure it’s a valid application and not fraudulent. I’ve known her for years and she hates her job. I wouldn’t want her processing my claim since I’ve discovered that she votes for the GQP and was a trump supporter.

    It’s impossible for me to understand why it is so hard to get help when you’re unemployed even before covid especially when you have racists like her working those positions. She sees a Hispanic name and loses it.

  2. I still remember driving to law school, in disbelief, the day after Ronald Reagan was elected. After leaving a job teaching GED classes in a CETA Program, I knew that what Ronald Reagan was selling was the last thing the country needed. I’m glad I have lived long enough to see the country finally reject the White privilege he represented. We need less drama and entertainment and more compassion. Joe Biden may not keep us entertained, but he’s what the country needs.

  3. One pretty simple rule to follow: Do unto others as you would have them do unto you. Think about it, if we all did this to all of us???? Again, pretty simple.

  4. The fact that we use the term “working poor” to describe the vast majority of our fellow citizens tells you that we have lost our way. When you have to work multiple jobs just to meet the basics it’s clear that our wages are far below what they should be. Any business owner who pays just minimum wage is guilty of exploitation! I say this as a small business owner of 30+ years. We couldn’t have lasted in business without our employees and they deserve to share in the profits of that business.

  5. AgingGirl makes an interesting point about Republicans working for a government they hate. It makes you wonder why this new crop of the anti-government crew who’ve evolved from the Tea Party days wants to work for the government they intend to destroy.

    Once you look closer, it’s all a ruse by the wealthy who want control of the government so they can benefit themselves at the expense of everybody else. They don’t hate government largesse — they want it working for them only.

    You see it locally from the two “parties” who once they capture local government. Once they win an election, they begin enriching themselves, friends, and party loyalists.

    Go to Indianapolis and Washington and watch the same thing take place just on a grander scale.

    I’d love to see an actual independent audit of local governments throughout Indiana to evaluate how many residents legitimately pay taxes on their real estate. And not just from political party trickery. What about all the so-called non-profits across the country being used to shelter income from taxation. There is a reason both political parties have neutered the IRS. There is a reason Indiana’s state legislators have neutered IDEM and taken away the teeth of enforcement by local health departments.

    We are suffering from systemic fraud and corruption. No wonder the heavily weaponized police departments are empowered to do as they please. The public sector has become so corrupted it’s hard to recognize the good parts which work for ALL the people and not just those politically connected with their respective party.

  6. Any effort to reduce the footprint of the so-called welfare state must start with the abolition of the United States Department of Agriculture and its over 1,000 programs that provide revenue and income supports to farmers, 80% of which go to large corporate farms and less than 1% going to black farmers.

  7. The mortgage interest and property tax deductions were designed to encourage Americans to buy homes. It seems the road to Hell is indeed paved with good intentions.

  8. If …poor people and single parents lack the means to hire lobbyists… is the problem,
    then a comprehensive public campaign funding system is the solution.

  9. We all know and have used the term “The Big Lie” to describe Trump’s temper tantrum when Putin could not get him re-elected. I don’t know how a lie qualifies for that description but the Republican/Reagan tale of two economies at war is certainly very large, repeated often, and has devolved the country for three decades. By telling that tale as often as they have they created two economies, one that gives and one that takes.

    Which lie is has been most destructive is anyone’s guess.

  10. Ronald Reagan represented “white privilege?” I graduated college and law school while he was President and I found the law profession far from lucrative and non-law opportunities for lawyers virtually non-existent. For some reason Reagan’s “white privilege” agenda didn’t reach me.

  11. I have written dozens of times that the internal revenue and bankruptcy codes need a total redo, and that such redos not be written this time by corporate tax counsel in ultimate ALEC fashion. My biggest individual detestation in the internal revenue code is the provision called “carried interest,” a provision that allows hedge and equity funds to treat their income as capital gains rather than ordinary income when such income is so clearly ordinary income by any standard (except by the definition of Congress).

    Since treaties enjoy the same high status as the Constitution itself, beware of such negotiated tax treaties which override mere statutes, like the internal revenue code, and all under the banner of encouraging “foreign investment.”

    As for bankruptcy, where if possible the continuation of the corporate enterprise is foremost, I don’t like the power given to bankruptcy courts that allow judges to amend labor contracts, pension agreements and other such (presumably in good faith) agreements between bankrupt corporations and their employees. The bankruptcy act, especially Chapter 11, is in need of an extensive redo.

    I have many other suggestions for reform of these codes, but time and space limitations foreclose discussion of them here.

  12. Patrick Wiltshire – my grandfather, a Johnson County farmer for many years AND a Republican, always said that if a farmer needed a subsidy, what he really needed to do was to get out of farming! And he hated corporation-owned farms, too.

  13. I miss the days when we had family farms instead of corporate farms. My maternal grandfather had a farm and understood the importance of soil conservation. Agribusiness does not understand that.

    NPR had a program comparing the salaries of CEO’s to their employees. Disney has laid off 28,000 employees since the pandemic began and plans to cut 4,000 more. Some of their employees live in their cars and/or are on food stamps. Shame on them. I doubt that Walt Disney would ever have wanted to see that happen. St Vincent’s cut 500 jobs in 2003 and I lost my job as a result. I had worked there for 19 years. They cut 90% of their addiction and mental health services. Mental health and addiction have always been low on the priority list. There is system stigma in insurance companies with these disorders. So those who are struggling with opioid and methamphetamine addiction often find it extremely difficult to access good quality treatment that they can financially afford.

    Coporate America not only gets subsidies and evades taxes, they also buy back their own shares which falsely elevates the stock market gains. They continue to put shareholders before employees and the greater good. In some ways, I feel like their seeming willingness to object to changes in state laws that restrict voting is just a token move to make themselves look like they care about our democracy.

    Bush talked about conservative compassion. That’s an oxymoron. We need compassion for the poor, the hungry, the homeless , the disabled that is bipartisan. We need a country where both government and corporate leaders care about the health and welfare of its citizens. Healthy people are more productive, more likely to become entrepeneurs.

    I don’t know if we will see young people trying to make systemic change like we saw in the 60’s, but I wonder if that day is coming.

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