Suzanne Mettler, a professor of government at Cornell University, did a survey in 2008 which indicated that the majority of Americans who receive tax breaks or government aid do not think of themselves as benefiting from government programs.
This is partly a reflection of human nature, especially of American human nature. We Americans like to think of ourselves as self-reliant and independent, so we tend to forget the degree to which we’re not completely independent. But the chart also reflects the fact that many social programs were designed to hide the fact that they are social welfare programs.
We Americans don’t like to think of ourselves as depending on government. That is why, historically, the U.S. President and Congress have preferred to use the tax code as a means of social welfare and social engineering.
I am a retiree who benefits from Social Security and Medicare, which obviously are government social programs. But I also benefit from having been able to put money into Individual Retirement Accounts and defer taxes until I take money out. It is not so obvious that this is a government social program.
This makes the U.S. tax code very complicated. But when you stop and think about it, the effect on government is the same if I pay taxes at the normal rate and then receive a grant, or if I receive no grant and a tax reduction for the amount of the grant.
Another reason for tax breaks is the U.S. social policy is oriented toward the middle class, not the very poor. The 529 and Coverdell programs, listed on the top line of the chart, are means by which families can defer taxes on money saved for a child’s future college education. In order to benefit, you have to be in a position to save money in the first place.
The same is true of all the other tax break programs. An accountant friend of mine said many of his poor clients are unaware that they do not pay income taxes. They don’t distinguished between income taxes and payroll taxes, and they think that their Earned Income Tax Credits are refunds on income taxes.
Social insurance programs, such as Social Security, Medicare and unemployment insurance, are designed to give people a sense of entitlement. I paid payroll taxes all my working life, and still pay Medicare premiums, so I feel entitled to Social Security and Medicare and would have felt entitled to unemployment compensation if I ever had needed it.
And if I were a military veteran who served in wartime, I would certainly feel I had earned the right to the G.I. bill and other veterans benefits. I might not think of myself as “benefiting from a government social program.”
Even when you get down to the bottom of the list—welfare assistance, public housing and food stamps—some of the people who use these programs have in better times paid taxes to support them.
So the illusion of not benefiting from government social programs is understandable. But it is still an illusion.
I couldn’t find a link to Suzanne Mettler’s original 2008 paper, but click on Reconstituting the Submerged State: the Challenge of Social Policy Reform in the Obama Era for a follow-up paper she wrote, which includes the chart.
Click on Who Says They Have Ever Used a Government Social Program? for a recent paper by Suzanne Mettler and Julianna Koch of Cornell’s Department of Government.
If you’re like me and didn’t know what a 529 or Coverdell plan were, click on Coverdell Education Savings Account Vs. a 529 Plan for an explanation by State Farm Insurance.
Click on “Did Anybody Help Me Out? No” for an earlier post of mine about perceptions of social welfare.