Tax savings that cost more than social expenditures

From a 2013 Baltimore Sun piece, “Cut tax breaks, not food stamps”, how U.S. executives can save more in taxes in a single dinner than poor families can receive in food stamp money in a month:

Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax law allows companies to deduct half of the cost of business meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner for 10 people provides more public food assistance than the $279 an average household receives in food stamps for the whole month.

 
But somehow we can’t possibly afford such programs.

h/t Wonkblog: “The rich get government handouts just like the poor. Here are 10 of them.”

I suspect I’m going to have a lot more to say on this particular topic of tax savings that cost more than social program expenditures in future posts and episodes of the radio show. Particularly after I started reading through various Corporation for Enterprise Development (CFED) reports on tax subsidies to the wealthy, including their 2014 report “Redeploying $540 Billion in Federal Spending to Help All Americans Save, Invest, and Build Wealth” (PDF). Spoiler alert: Hundreds of billions of dollars in revenue is lost each year to Federal tax credit programs disproportionately (and needlessly) benefiting wealthy households.

If you said it, then you meant it, Oklahoma GOP chairman

The AP reports that the Oklahoma Republican Party chairman is in hot water over a Facebook post comparing SNAP (food stamps) recipients to wild animals that you shouldn’t feed:

The original message, posted Monday, said 46 million Americans participate in the Supplemental Assistance Nutrition Program, or SNAP, commonly referred to as food stamps. The post then said the National Park Service encourages people not to feed wild animals because they ‘‘will grow dependent on handouts and will not learn to take care of themselves.’’

As is usually the case with other like-minded posters in such situations, he thinks everyone just didn’t get it and it’s all a big misunderstanding:

Party chairman Randy Brogdon said on Facebook that the post was intended to illustrate the cycle of government dependency. He apologized ‘‘for any misconceptions that were created.’’

 
Worth noting:

About 604,000 people receive SNAP benefits in Oklahoma, mostly the elderly, disabled, and children.

That’s almost 7% of the Republican-dominated state’s entire population — which is a pretty comparable figure to a Democratic-dominated state like Massachusetts, but not a glowing testament to the dependency-ending benefits of conservative governance.

In predictable fashion, fellow Republicans objected more on the optics than the substance:

‘‘It is not a representation of the party as a whole and it makes the party look uncaring,’’ said state Senator Stephanie Bice, a Republican.

(My bolding.)

However he may have phrased it, that vehement opposition to and dismissive view of food stamps is the mainstream position of the Republican Party. Hard not to “look uncaring” when you are uncaring. Dressing it up rhetorically in a nicer outfit doesn’t fix the underlying problem.

In the immortal words of one Christopher Brian “Ludacris” Bridges in his 2008 commentary, “Politics As Usual”:

Talkin’ slick and apologizin’ for what?
If you said it, then you meant it.
How you want it: Head or gut?

 


Previously from Bill on Similar Topics:

“How the South Really Operates”
“The American South: Take the Money and Run”

United States Census Southern Region

United States Census Southern Region

The distance we’ve come on poverty

The United States still has a long way to go on reducing poverty in the United States, but all things considered, things have gotten better. On a number of key underlying metrics as well as quality of life standards, we’ve seen improvements since the beginning of the “War on Poverty,” fifty years ago this month, under President Johnson.

It’s worth keeping this knowledge in mind when the “War on Poverty” social programs — Medicare, Medicaid, food stamps, Head Start, Job Corps, welfare, etc. — that have provided safety nets and opportunities for low-income and struggling Americans are coming under attack today. They’re often dismissed as ineffective because topline poverty hasn’t moved very much since 1964 (though it also hasn’t exploded out of control, despite much higher levels of inequality, which is a good sign). So knowing the positives is key to defending them.

The New York Times published a short piece today summarizing the successes and failures of the anti-poverty efforts since January 1964.

The good:

Still, a broad range of researchers interviewed by The New York Times stressed the improvement in the lives of low-income Americans since Mr. Johnson started his crusade. Infant mortality has dropped, college completion rates have soared, millions of women have entered the work force, malnutrition has all but disappeared. After all, when Mr. Johnson announced his campaign, parts of Appalachia lacked electricity and indoor plumbing.

Many economists argue that the official poverty rate grossly understates the impact of government programs. The headline poverty rate counts only cash income, not the value of in-kind benefits like food stamps. A fuller accounting suggests the poverty rate has dropped to 16 percent today, from 26 percent in the late 1960s, economists say.

 

So on the brass-tacks/basics/fundamentals level, we’ve seen big improvements. And being poor, while certainly still no picnic, isn’t as horrendously bad as it was a half century ago, when it was still only a step or two away from “Grapes of Wrath” territory.

Then, the bad:

But high rates of poverty — measured by both the official government yardstick and the alternatives that many economists prefer — have remained a remarkably persistent feature of American society. About four in 10 black children live in poverty; for Hispanic children, that figure is about three in 10. According to one recent study, as of mid-2011, in any given month, 1.7 million households were living on cash income of less than $2 a person a day, with the prevalence of the kind of deep poverty commonly associated with developing nations increasing since the mid-1990s.

 

However, I still think on balance it’s been more successful than not, and we should keep fighting for more gains and not turn our backs on these programs by mythologizing their failures.

There’s a lot of wishful, rose-colored-glasses nostalgia surrounding the 1950s and early 1960s, in terms of glamorous economic good times. There’s at least some truth to that, in that the United States was the only industrial economy left standing for a brief time and high-paying jobs were plentiful for many segments of the workforce. But it was, in reality, also a period (as noted above) where large parts of the country still didn’t have electricity or other basic features/services of modern society.

I’m reminded of one of my favorite quotations:

“In the world of politics, nostalgia is a kind of quitting. It says, ‘I can’t deal with today, can we go back to yesterday?’ But a particular yesterday, without its attendant problems.”
– Ta-Nehisi Coates

 

The War on Poverty hasn’t done as much as we had hoped it would. But it has made a difference for many millions of Americans over the past fifty years. I also agree with those who say that broader economic efforts — including raising the minimum wage need to be made to reduce poverty more widely. Even so, I still want prioritize protecting and strengthening these social programs, not gutting them.