Monday, April 26, 2010

Is Your Grandma a Welfare Queen?

Apple-cheeked grandma woman with a gold crown, riding in a Cadillac stuffed with frozen pizza boxes
Pioneer Press economics columnist Ed Lotterman recently shed some light on a topic that's received more than enough attention via the Drudge Report, Fox News and Katherine Kersten's column: the widely quoted statistic that 47 percent of Americans pay no taxes.

Of course, many of these same people do pay taxes: sales tax, state income tax, and payroll taxes to Social Security and Medicare. What they don't pay is federal income taxes.

The implied (or sometimes overtly stated) fear is that these "freeloaders" will use their voting power to vote themselves even more of other people's money.

As Lotterman put it in his Sunday column, A Profound Misunderstanding of Taxes:

To some, the idea that a fifth of all households get 75 percent of their money [from the federal government] conjures up images of welfare queens driving their Cadillacs down to the supermarket to buy frozen pizzas with food stamps....

A much truer picture of this group on the public dole would be a bunch of blue-haired old ladies playing Rummikub in a senior citizens center. That is because the biggest single set of households in this lowest-income group are retirees on Social Security. And a disproportionate number are women who have outlived their husbands.

In many cases, they are not indigent. They may live in a house they own and may be drawing down their retirement savings. But if a modest Social Security payment is their primary source of income, as it is for many retirees, they would both fall into this income class and get most of their income from the government. Are these really leeches whose voting threatens our society?

Disabled people on Supplemental Security Income are another set in this poorest fifth of all households. Many are not eligible for Social Security because their physical or mental problems kept them from ever working long enough to become vested in the system. Some may have jobs but their SSI payments, together with food stamps and other transfer payments for low-income people, mean that what they get from government is large relative to their earned income.

Is our economy becoming less fair to higher income people and less economically efficient because people who spend their days in sheltered workshops or who are blind or confined to motorized wheelchairs throw their political weight around?
In concluding, Lotterman writes, "Yes, there also are people among the poorest 20 percent of households who are lazy, who make bad decisions, ... and who are dishonest. But I find such people at all income levels."

The same can be said, I would add, among that newest group of individuals -- corporations.

1 comment:

Nancy/BLissed-Out Grandma said...

So true! Well stated by Lotterman and by you.