Tuesday, March 1, 2011

A Hidden Welfare State? Really?

I was told about a recent LA op-ed article, called "Hidden federal benefits" here. I include a small portion below, but feel free to read the entire article. It is more of the same.

Three programs make up most of this "hidden welfare state," as another scholar calls it. 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. Yale political scientist Jacob Hacker calculates that such "tax-advantaged" programs make up almost a third of America's social welfare spending.

Yet a lot of citizens simply don't recognize these as 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."

In fact, according to a 2008 survey by the Cornell Survey Research Institute, 60% of respondents who received a home loan interest deduction told surveyors 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.

* * *

Notice I didn't highlight or emphasize any specific statement, because I want it to stand as presented. It's pure drivel. I say that because the article operates under a perspective I completely disavow. Using his own example, he states the government allows you set up "tax free" savings accounts, and by not taxing the money from you, it (government) is giving you a hidden benefit. Then, he has the gall to call this "social welfare spending".

The foundational premise behind this thought (using the "thought" word quite loosely) is that everything you own (including yourself and any/all efforts you make) *BELONGS* to the government. And, then, government graciously gives you a "benefit" by NOT taking some (or all) of the results of your labors. Further, it establishes that government - in its infinite wisdom - will determine what is "best" for its citizens by deciding "who" gets to keep "what". And oh-by-the-way, anything government DOESN'T take you should be humbly thankful for being allowed to keep it.

The only good thing about this article is you can tell exactly where this clown stands... right over there, with his hand in my pocket, telling me I should thankful he is stealing from me...


- Steve


  1. I'm a little disappointed by your fairly superficial treatment of this article.

    I assume even an unhinged libertarian like yourself would concede that government does indeed have legitimate functions. And, since these functions DO reqire taxation, favoring one group or another amounts to a form of subsidy - or "welfare", if you will.

    But note, carefully Steve, the issue of who pays how much in taxes is COMPLETELY SEPARATE from the REACH of government you propose to define, and you could have made a much better argument.

    If I were a libertarian I would have said that government has no business designing tax laws which reward certain legal activities by private citizens and penalize other activities which are equally legal.

    For instance, why should it be the business of government whether or not citizens should be home owners?

  2. I treated the topic superficially because HE did. He's playing word games for an emotional impact, and I called him on it. One needs to be careful when playing with words and what they MEAN. You and I understand that using a different word which *can* be a synonym (according to one of many meanings) doesn't change what something *IS*.

    BTW - I vigorously challenge your definition that a tax 'exemption' should be considered in the same breath with what is commonly called 'welfare'. And a 'subsidy' is not the same as 'welfare' *OR* an 'exemption', either. Three different things.

    HOWEVER - As to your point about governmental favoritism in taxation, I absolutely agree 100%. (Surprised?) Whether I'm a libertarian (little "L") or not, let me state for the record that I consider such activities to be attempts at economic and/or social engineering at its most subtle and devious... and outside the legitimate functions of government. I disapprove of *all* forms: that includes favoritism made collectively (corporations, groups, etc.) or to specific individuals. The INTENTION behind such favoritism doesn't make it Right.

    And - FYI - I didn't buy a house because of the tax break, nor do 99% of homeowners. I've stated before that government interference in *TRYING* to manipulate (i.e., increase) the number of homeowners - especially among those financially unable to handle it - is a significant part of the reason we're in our current economic mess. So: NO, who is/isn't a homeowner is NOT any of the government's business... Glad to see we finally agree on this point.

    But, C'MON CHRIS! ... Did you completely miss MY point? That this bozo clearly considers any and all tax breaks as 'welfare' S-P-E-N-D-I-N-G(!) Do you agree with his definition?

    My point is simple: when the government provides a tax break (for whatever reason) such action is not an aspect of government *SPENDING*. It is a choice to tax/not-tax something. In other words, the government is choosing NOT to remove wealth from The People who created it for some reason. Whether a particular tax 'advantage' is a Wise Action or not is a separate issue.

    I highly suspect (but obviously cannot prove) this bozo choose this particular phrasing because of the current atmosphere and clamor among the unwashed heathens (e.g., those of us worried about excessive spending: like you and me) who are demanding Real World *REDUCTIONS* in *Spending* by the government. I would further guess he favors addressing our ever-increasing debt problem by simply increasing taxes to cover the shortfall, and he sees a 'solution' in reducing or eliminating such tax breaks as those he mentioned. Or perhaps, he deliberately wishes to 'punish' ordinary taxpayers for taking advantage of options to legally reduce their tax liability when possible. Those otherwise honest folks must be evil about not wanting to pay taxes...

    Of course, I might be wrong about his motive: at first glance, his doesn't appear to be the kind of mind I would enjoy exploring. And it's likely I am ascribing a level of subtly to his purpose he doesn't possess. I'm just miffed that he appears to assume that those who CREATE their own wealth don't DESERVE it - since everything *belongs* to the government anyway. Sheesh!

    The only positive statement I can make about him (faint that it is) is that he is unrepentantly certain he's doing the Right Thing by having his hand digging around in MY wallet: he has a defined belief system and is acting accordingly... he believes HIS ends justifies HIS seizure of MY means.

    He's still an idiot.

    - Steve

  3. Woo-ha Steve!

    I get your point. However I'm afraid you're building it more on the writer's choice of words rather than the reasoning behind it.

    But no matter. Eventually, we'll probably have to come to grips with the larger question of how our visions of an ordered society differ - fertile ground I think for our continuing philosophical fist fights.

    It did occur to me while reading this latest of your's, of all things, how nature deals with sickle cell anemia as opposed to how men deal with it. And, as it happens, nature's method is far more effective than the puny strategies of men.

    Absent a cure, men propose to treat the symptoms - thereby guaranteeing future victims. Yet, without anything approaching the lofty aim of kindness or tolerance, nature takes the more direct course of simply killing off the carriers.

    Is then, what we consider in common parlance to be "welfare" nothing more than a treatment of symptoms which allows the disease itself to continue?

    And, if so, what basis do we have, in the capacity of government, to expect human solutions will work better than nature's?


  4. For the questions posed at the end of your comment...

    Question #1. YES... I think it's arguable that there is no purpose behind the 'treatments' which are INTENDED as being able to 'solve the problem'. If 'solving the problem' was the goal, we would already have mechanisms to measure the success of our efforts, we would be evaluating the results, and then taking appropriate action - up to and including ABANDONING 'Failed Programs', no matter how popular they may be.

    Question #2. NONE... Again, IMHO it is the APPEARANCE of trying to solve problems which is the Real Goal, at least as far as government is concerned. That is not to say some *individuals* work very hard in the attempt to find workable solutions to real problems, or that many persons may (separately) reach compatible conclusions about a suggested course of action. However, that doesn't mean what they propose can work or ever will work. Humans typically develop their own solutions, simply because they DO NOT LIKE the one Nature will use. BTW, "*collective* expectations" is virtually an oxymoron.

    And, yes, I agree this topic (generally and specifically) will be a fruitful area for future discussion.

    - Steve