Ezra Klein highlights a strange fact about U.S. government programs – most of the biggest ones work so well nobody realizes they are getting government hand outs.
“Then there’s what Mettler calls “the submerged state.” These policies are mostly, though not exclusively, tax breaks. They include the much-beloved home-mortgage interest deduction and the tax exclusion for employer-provided health care. Recipients of these policies — and there are tens of millions of them — are rarely cognizant that they’re benefiting from a government program.
But they are. “Indirect social policies offer benefits that are comparable to direct social benefits both in their purposes and in their costs,” Mettler and Koch write. “Both are targeted to specific groups of people, aimed to reward some kind of activity or some class of persons whom policymakers deem worthy of public support. From an accounting perspective, as well, both types have the same effect: They impose costs on the federal budget, whether incurred through fiscal obligations or lost revenues.”
The costs are significant. Huge, in fact. Tax expenditures now cost the federal government $1 trillion annually — more than Medicare and Medicaid combined. And they’re regressive.
There is also a pattern to these programs: The more a government social program benefits wealthier Americans, the less obtrusive it is. We design policies for the poor in ways that make it hard to escape the knowledge that the government is providing help. But richer Americans rely on programs that are “submerged.” The Tax Policy Center estimates that eliminating all individual-income tax expenditures would raise levies on the bottom 20 percent by $931. For the top 1 percent, the tax increase would be almost $280,000. (Notably, both President Barack Obama and Mitt Romney have talked about cutting back on tax expenditures for the wealthy, but neither has provided details.) Even so, many middle class and wealthy beneficiaries have no idea that they’re receiving any government assistance at all.“
I am decently liberal, and this is the kind of thing which just infuriates me. We’re helping out nearly every resident of the United States in massive direct cash transfers, and nobody knows about it.
How is this possible?
Even if the program is questionable – even if it’s horrible – the government should let people know what it’s doing. Spending .1% on marketing would be a big help to make programs more known by people, so they know they are getting help from the government, just like the bums they feel are ripping off the system.
You’d think this would be low hanging fruit for the libs and Dems to exploit, yet here we are.