The 96 Percent

by John Sides on September 25, 2012 · 15 comments

in Campaigns and elections,Policy,Public opinion

What the data reveal is striking: nearly all Americans — 96 percent — have relied on the federal government to assist them.

That is from a piece that Suzanne Mettler and I have at the New York Times. Drawing on some data that Suzanne collected, it examines the “47%” notion and in particular how people do or do not use government social policies of various kinds. Simply put, the experience of benefiting from federal social policies is nearly a universal one, not one that cleanly divides the electorate.

For more on this subject, see Suzanne’s book The Submerged State, which Henry wrote about here. Suzanne’s earlier guest posts are here, here, and here.

 

{ 15 comments }

PLW September 25, 2012 at 10:13 am

Two issues

1. “Relied on”!=received.
2. This definition of receiving benefits is bizarre. Under that definition, a completely neutral change in the tax code, that raises everyone’s base rate 1% and gave everyone a 1% deduction would mean that 100% people relied upon the federal government. A change saying you have to pay a tax for not owning a house (sound familiar… essentially Obamacare) would lower the number but have no real effects.

John Sides September 25, 2012 at 4:44 pm

PLW: Re: #1. The terms aren’t strictly synonymous, but I think both apply. When I was in graduate school, I received some federal student loans. I also relied on those loans to help pay my expenses. “Relied on” only seems inappropriate if you think it means “had no other income but.” That’s not the sense in which we mean it, which is clear in the passage quoted above when we say “assist.”

OneEyedMan September 25, 2012 at 10:40 am

A more relevant question is what fraction of Americans are net recipients (in an NPV sense) over their lifetimes. I have a feeling that’s less than 47% but how much less?

max September 25, 2012 at 11:54 am

A few questions re: the 96 percent/NYTimes article:

1) Are these survey data publicly available for other to analyze. I’d like to play with the data myself.

2) I’m still not sure this really debunks the takers vs. makers argument. First of all, while Professor Mettler’s argument about the “submerged” welfare state is interesting and novel and with its merits, I still fail to see how giving someone who is paying taxes a “deduction” on something like a home mortgage is equivalent to providing social welfare benefits (food stamps, unemployment) to people who may not be paying more in taxes than they are receiving back.

3) What data exist (perhaps these data would allow it) to actually do an “accounting analysis” that looks at how much $$$ people pay into the government versus how much $$$ they take in benefits. I.e., amount of taxes paid in (making) versus amount of benefits taken back (taking). This could help us sort out the payroll vs. federal income tax conflation since presumably people who pay only payroll taxes are getting something back in the form of medicare and social security benefits later on, BUT SO TOO are folks paying BOTH payroll and federal income taxes. The questions is what is the differential on what one pays in overall versus what one takes in a lifetime.

Mark September 25, 2012 at 12:40 pm

I’m with the other commentors on this. This type of analysis is part of the standard progressive playbook. Conflate means tested welfare with programs like social security and Medicare which progressives told voters for decades that they were paying for and then act surprised when it turns out the voters believed them! Contrary to your linked article this is not “a community of shared sacrifice”.
What this does point out is that progressive policies are the source of our much lamented gridlock. Eight decades of these programs has created interest groups to fervently protect each and every one of these programs. Even programs which progressives now hate, like ag subsidies which were created by them as the capstone of New Deal policies (in order to, in today’s terminology, “make food more expensive for poor children”), stick around because they now have their own powerful constituency. It is the fatal flaw in progressive governance theory. Another set of laws, another round of tax increases and hoping for the mythical “perfect regulator” won’t fix it.

Jacob Hartog September 25, 2012 at 12:50 pm

I think many of the conversations about government services and beneficiaries are confused about what the federal government does and does not do:

DOES: Cut a bunch of checks to individuals, both explicitly (Social Security, Veterans’ benefits, and Medicare and Medicaid payments to providers) and covertly (mortgage tax deduction, etc.)
DOES: Cut a bunch of checks to state and local governments.

DOES NOT: Outside of DoD, administer huge programs and deliver much in the way of public services itself.

The contrast with other modern welfare states, with our country having a much higher number of people receiving a negative effective income tax rate, arises because we want to use the federal government as a cashbox instead of as a direct public service provider. Conversations about the value and scope of desirable public services are often confused because we are pretending we are talking about the federal government building bridges and putting up solar panels, when really the federal government is cutting checks to private doctors and encouraging other people to put up solar panels by not taxing them.

ben September 25, 2012 at 1:10 pm

Jacob,

How does the mortgage tax deduction amount to government “cutting” a check to anyone. One can argue whether it’s a good governmental policy (I tend to think it isn’t), but all that it does is result in people who are paying taxes paying less. It’s not a handout and no one is “getting something for nothing” when it is bestowed. People are just paying LESS. It’s in no way analogous to unemployment benefits, medicaid, or food stamp benefits which are a direct transfer of governmental monies to an individual without that individual having paid for it in the first place.

ben September 25, 2012 at 1:12 pm

I should have also noted that if someone had inherited a house with a mortgage but that person’s income was not high enough for him/her to be paying federal income taxes, the mortgage tax deduction would not result in that person getting a check from the government. You have to actually be among those paying taxes to get this break.

Scott Monje September 25, 2012 at 2:35 pm

Yes, that’s the point (or one of the points). It’s a benefit that favors people with higher incomes. The more expensive the mortgage, the greater the benefit.

ben September 25, 2012 at 2:48 pm

the deduction may be used by higher income people, but it’s still not analogous to government transferring income to individuals for food stamps, unemployment, or medicaid which involves a direct transfer to citizens who have disproportionately not paid into the government coffers that fund those benefits. the deduction is saying to people who are funding those coffers, we will take a little less. that “less” is still “more” than what those taking means tested welfare benefits are paying INTO the system.

Scott Monje September 25, 2012 at 3:21 pm

If you assume a baseline tax, then from a budgetary perspective, money not brought in because of a deduction is the same as money brought in and then expended (only more efficient). That doesn’t address the question of whether the individual in question is a net beneficiary, and so the point above about “relying on” government benefits not being the same as “receiving” government benefits is valid, but it does address the question of a deduction being similar to cutting a check.

OneEyedMan September 25, 2012 at 3:56 pm

If you undo the tax expenditures then you should also undo the progressiveness of the income tax system as well because any changes in revenue from variable rates are the same as changes from deductions or tax expenditures. Since US tax are more progressive than other countries (http://themonkeycage.org/blog/2012/02/16/the-facts-about-tax-progressivity/) , this actually makes the implied transfers even larger. Indeed, you might argue that since poll-taxes minimize tax distortions and asign every person the same responsibility best thought of as the proper baseline. Even a flat tax involves subsidies to some (those that earn less or consume more public goods for their income) that are best thought of as tax expenditures.

With all that in mind, it isn’t at all clear to me that focusing on tax expenditures actually helps very much.

John Sides September 25, 2012 at 9:40 pm

Two quick points. First, if you exclude tax expenditures entirely and focus only on direct benefits, our points still stands: large majorities of Republicans and Democrats use these programs.

Second, in her earlier guest post, Suzanne explained why tax expenditures can be analogized to direct government benefits:

http://themonkeycage.org/blog/2011/10/24/11470/

albatross September 26, 2012 at 9:50 am

From a budget perspective, knocking $100 off everyone’s tax bill is equivalent to mailing a $100 check to everyone who filed tax returns, right? You can argue whether there are moral differences, but the effect on the budget is identical, and I find it hard to see a reasonable argument that would say one of those things was good policy while the other was bad policy.

ben September 26, 2012 at 11:56 am

“From a budget perspective, knocking $100 off everyone’s tax bill is equivalent to mailing a $100 check to everyone who filed tax returns, right?”

…except that the $100 direct transfer in social welfare benefits to an individual is often going to someone who doesn’t file a tax return (i.e., they aren’t paying into the system).

So yeah it’s different. From an accounting perspective it’s identical, but from the “moral” standpoint it’s vastly different. In one case someone is being able to keep MORE of the money they earned rather then pay into government, in the other case someone who ISN’T paying in to government taxes is receiving $ from govt.

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