When discussing federal “benefits” to individuals one of the arguments that is made by those opposing such benefits is that it leads to a nanny state, that it increases the size of government and the size of its spending, deficit, debt, etc. I use the word “benefits” circumspectly because many of these so-called benefits have—to some extent—already been paid for with our taxes and with the taxes of those “others.”
And indeed one of the most common complaints is that “we”—it is always “we”—are unfairly paying for the handouts to benefits for others—it is always “others”—with our taxes.
Of course, Social Security, Medicare, Medicaid and now “Obamacare” rank at the top of those nanny state programs for which “we” pay such high taxes out of our hard-earned dollars for the benefit of “others”: the slackers, the lazy, the deadbeats.
Fair enough.
But it also seems fair that if we begrudge criticize others for reaching out for—even just passively accepting—such government generosity in the form of assistance, benefits, or handouts, “we” should also think twice before participating in programs or accepting our share of federal “social largess” that are hidden in what one political scientist calls “the submerged state” and another scholar calls the “hidden welfare state.”
I am—or, rather Gregory Rodriguez at the LA Times is—talking about a “conglomeration of tax incentive and subsidies” that so many Americans conveniently don’t recognize as government benefits and which are paid with “our” tax dollars:
The first is employer-based health insurance, which is subsidized by the ability of businesses to deduct some of the costs from their taxes. The second is the home mortgage interest deduction for individuals, and the third is the creation of tax-free retirement accounts, into which employers and employees can contribute.
Surprisingly, such “tax-advantaged” programs make up almost a third of America’s social welfare spending according to Yale political scientist Jacob Hacker.
And Rodriguez explains why he, and others, consider these to be government benefits:
We don’t get U.S. Treasury checks for mortgage interest deductions (the deduction just lowers our tax bill). Nor do we directly see the hand of the government in our healthcare; we deal with a private insurer, private doctors and our employers’ benefits representatives, not a national health service. And our 401(k) plans just seem like savings accounts, not a government benefit. The way we’ve set it all up has, in Mettler’s words, “shrouded the state’s role, making it largely invisible to ordinary citizens.”
It is even more interesting how those who have used these programs—and there are many other similar programs—don’t even realize that they have used a federal benefit program.
For example, 60% of respondents to a 2008 survey by the Cornell Survey Research Institute survey who received a home loan interest deduction said that they had never used a federal social program, “not realizing that the tax break was the result of the government intentionally forgoing revenue to further the social goal of homeownership.”
Likewise, respondents who benefited from tax-advantaged education savings accounts, such as 529 plans, were even more likely (64.3%) to say that they had not used a government program.
Very interesting.
Since we are on the subject of “we” paying for the benefits of “them,” I wonder how many would agree that Americans who do not use the school system, our roads and other public services, public infrastructure systems and facilities, etc. should not have to pay their share of taxes that go towards the construction, operation and upkeep of such “common good” assets.
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