Welfare for the Wealthy

John Sides of The Washington Post interviews Syracuse University political scientist Chris Faricy on his newly published book “Welfare for the Wealthy.”

Faricy cites a few examples of how tax expenditures disproportionately benefit the wealthy: “One example is the collection of tax subsidies for private pensions. In 2015, the average household in the top 1 percent received pensions subsidies worth over $13,000 while the average benefit for a middle-class family was only $1,000. The main reason for this discrepancy is the progressive federal income tax structure.”

Faricy’s book shows the correlation between the growing polarization of the Democratic and Republican parties and the rise in private welfare spending like tax expenditures: “Political polarization relates to increased tax subsidies in three ways. First, polarization has increased the difficulty of passing new spending through the normal budget process and therefore privileges subsidies with fewer legislative veto points.”

“Second, as polarization has reduced the public trust in government, legislators have had to find a way to fund their policy priorities without being perceived as growing the government.”

“Finally, polarization has been asymmetric — with Republicans becoming more conservative than Democrats have become more liberal. Because of this, periods of divided government favor political compromises that use tax expenditures.”

“Most citizens, even educated ones, do not understand who primarily benefits from tax subsidies. The complexity of tax expenditures makes it easier to distribute federal money to unpopular groups such as the wealthy and corporations.”

2 Comments

  1. I’m not claiming to have any kind of expertise in this area so if I’m missing something please point it out, but one line seems fishy…”The main reason for this discrepancy is the progressive federal income tax structure,” but from what I can see there’s no explanation of how that ties in. I’d be curious to hear what that is. Otherwise it just sounds like more Koch-esque, faux concern for the poor, “Liberal policies actually harm working people and we want to fix it! If we only implemented a regressive tax structure and a few other items on the Norquist/Rand wish list, these people’s lives would turn around in an instant!” tripe.

    1. Yep, that sounds very fishy to me too. He COULD be talking about the simple point that since marginal rates are progressive, then the rich are able to leverage any tax benefits to a much greater net return. One way to fix this would be to cap all such programs. The ATM was supposed to fix some of this but it is not working because of constant tinkering.

Comments are closed.