“Why Republicans Love Taxing The Poor”: This Hurts Us More Than It Hurts You
The reformist wing of the Republican Party, which has a new book of policy essays out today, is a coterie of right-leaning intellectuals engaged in the Lord’s work of reimagining a non-plutocratic agenda for the party. The eternal problem with the reformists, however, is that they’re all playing an inside game, vying for influence within the party and seeking the ear of its leading figures. The need to maintain the good graces of the powers-that-be causes them to couch their advice with a delicacy that routinely veers into outright fantasy.
Ramesh Ponnuru, one of the contributors to the new volume, provides a case in point. In his Bloomberg View column, Ponnuru argues that Republicans should counter the Democrats’ campaign to lift the minimum wage by proposing instead to increase the Earned Income Tax Credit, which “would give Republicans a way to show that they want to help the poor — and that their stated objections to raising the minimum wage are sincere.”
One problem with this plan to get Republicans to increase the Earned Income Tax Credit is that, as Ezra Klein points out, they’re currently fighting extremely hard to cut the Earned Income Tax Credit. Ponnuru’s column doesn’t mention this highly relevant detail.
What’s more, one of the main reasons the Earned Income Tax Credit exists is to cushion the impact of state taxes, which often force workers on the bottom half of the income spectrum to pay higher rates than the rich. And why are state taxes so regressive? Well, a main reason is that Republicans want it this way. The states that raise the highest proportion of their taxes from the poor are Republican states. The EITC is in large part a way of using the federal tax code to cancel out Republican-led policies of taking money from poor people, so naturally Republicans at the national level oppose it, too.
Should Republicans start endorsing plans to give poor people more money? Well, sure, that would be great. It would also be great if Boko Haram came up with some new policies to help educate girls. In the meantime, a more realistic goal might be to just stop hurting the poor.
Obviously, Ponnuru’s policy goal here is admirable. It would be lovely to have a Republican Party that was not monomaniacally focused on redistributing income upward. (How such a reform could be pulled off without upsetting the basic parameters of the party — no new taxes, high military spending, no cuts for current retirees — is a problem none of the reformists have answered and that probably has no answer.)
I can see why Ponnuru needs to present his idea, which is a 180-degree reversal of the Republican agenda, as “a way to show that they want to help the poor.” The trouble is they don’t want to help the poor, if you define “help” as “letting them have more money,” as opposed to “giving them the kick in the ass they need to stop being lazy moochers.”
By: Jonathan Chait, Daily Intelligencer, New York Magazine, May 22, 2014
“They Get You Coming And Going”: In America, Being Poor Can Be An Expensive Proposition
Today I came across this very interesting, albeit depressing, bit of data. It’s an analysis by a travel site called Hopper that shows that it costs more to fly in states that have the lowest median incomes.
For example, the study found that in Mississippi, the poorest state, a “good deal” round-trip flight costs about $400, while in Maryland, the state with the highest income, an equivalent ticket costs around $300. The researchers also found that “typical round-trip airfare declines by $2.30 for every additional $1000 in median household income.” The reasons for the increased prices in the poorer states include “average distance traveled, demand density, and airline competition.” Presumably, there’s less demand and less airline competition in poor areas of the country because people there have less money for leisure travel, and also because those locales have less economic development and thus less business travel.
The higher price of air travel for low-income folks is yet another data point that paints a bigger picture: in America, being poor can be an expensive proposition. There are countless, painful examples of this. Food and other basic items tend to cost more in poor neighborhoods. The poor lack access to credit and so are easy prey for payday lenders charging exorbitant interest rates. Poor people are more apt to bounce checks; hello, fees for insufficient funds! There are also late fees for credit card payments — you know, the kind of thing listed in print so fine you need a magnifying glass to be capable of reading about it. But my personal favorites are those extra charges they tack on for restoring utilities they shut off because you couldn’t pay your bill on time in the first place. “They get you coming and going,” as my old man used to say.
In her classic book, Nickel and Dimed, Barbara Ehrenreich described a host of other expensive indignities that plague the working poor. For example, many of her low-wage co-workers were living in hotel rooms, which actually were far costlier, on a monthly basis, than local apartments. But the workers couldn’t move into the apartments because they lacked the month’s rent plus security deposit the landlord required. Many low-wage jobs also require uniforms, the cost of which comes out of the worker’s paycheck, or cars, which the workers are expected to maintain themselves.
There are even darker examples. I wonder how many Americans have put off going to the doctor because they lacked health insurance, sought treatment only when their symptoms were advanced, and ended up being bankrupted by medical bills as a result.
Many of the examples I’ve cited in this post could be greatly improved by some well-targeted regulatory fixes. The rights of workers and consumers against employers, the banks, and the credit card companies need to be vigorously championed, and in some cases, re-invented for our new digital era. There’s no earthly justification other than greed for the $35 bank overdraft ripoff, or the cell phone company gouging you to restore your service because your payment is late. It’s also long past time we bring re-regulation to the airlines. A more regulated airline industry might help bring down fares in certain overpriced markets. Our 30-year old experiment with airline deregulation has hardly been a rousing success — read the excellent 2012 Washington Monthly magazine article by Phillip Longman and Lina Khan for more information on this score.
In addition to more consumer regulation, we also need a much higher minimum wage and a far more generous safety net for poor people in this country. If poor people had more economic resources to begin with — if they simply had enough money to pay their bills on time, and to save a little money for a rainy day — they would never be forced to pay such an outrageously high price for being poor.
By: Kathleen Geier, Washington Monthly Political Animal, May 3, 2014
“Charity Is Not A Substitute For Justice”: Paul Ryan Still Doesn’t Understand The Scale Of The Poverty Problem
Earlier today, House Budget Committee Chair Paul Ryan (R-Wis.) continued his study of poverty with a hearing entitled, “A Progress Report on the War on Poverty: Lessons from the Frontlines.” Featuring witnesses from several poverty-fighting non-profits, Rep. Ryan styled the hearing as a “listening exercise” to hear about the strategies these charities and non-profits use to help alleviate poverty on the local level.
While it is admirable that Rep. Ryan gave a platform for community leaders to share their stories, he seems to have no sense of the scale of the problem before him. Indeed, Rep. Ryan’s veneration for the work of private charity is quite the contrast with his opinion of the federal government’s anti-poverty programs, which he has disparaged as “duplicative,” “complex,” and “ineffective.” However, for as much good work as it does, private philanthropy has well-known biases, as charitable donations tend to flow disproportionately to more glamorous causes, and often dry up during business cycle downturns—just when they’re needed most. In short, while individual charities and non-profits do incredible work to help our communities, they lack the ability to create widespread change; only the federal government has the resources to help alleviate poverty at the scale that is required.
While all of the witnesses who appeared at the hearing—including, ironically, both witnesses called by the Republican majority—represent organizations that receive federal funding, only one of the witnesses, Marian Wright Edelman of the Children’s Defense Fund, used her time to point out the importance of government programs. She cited a 2013 Columbia University study that found that government programs such as the Earned Income Tax Credit (EITC); Supplemental Nutrition Assistance Program (SNAP, or food stamps); the Women, Infants, and Children nutrition program (WIC); and Supplemental Security Income (SSI) reduce poverty by approximately 40 percent. Kathleen Short of the U.S. Census Bureau has also performed research on this topic, finding that government programs such as WIC, SNAP, and EITC, among others, all had a significant impact on reducing the poverty rate. In addition, Feeding America estimates that private charities make up just 4 percent of all food assistance resources in the U.S., with federal programs such as SNAP comprising the other 96 percent.
But it seems that Rep. Ryan doesn’t understand the unique role only the government can play in helping lift citizens out of poverty, as his recent FY15 budget proposal cuts billions from poverty-fighting programs, as Matthew Yglesias over at Vox recently pointed out. We also analyzed the proposed Ryan budget and projected that, if enacted, Rep. Ryan’s huge cuts would have a negative impact on economic growth and cost the labor force millions of jobs.
If Paul Ryan truly wanted to help the poor, he would not just rely on local leaders and private charities to reduce poverty in our country; instead, he would propose a budget that supports social safety nets and poverty-fighting programs. He would support increasing the minimum wage, which would give 27.8 million Americans a raise and help the parents of one in five children. And he would vote to extend Emergency Unemployment Insurance, which would help unemployed Americans in our weak labor market and even generate jobs.
Marian Wright Edelman got things right during the hearing when she said that “all of our charity is not a substitute for justice and a fair allocation of public resources.” Unfortunately, the House majority seems to think that publicly-funded programs must be ineffective just because they are publicly-funded—despite all evidence to the contrary.
By: John Smith and Alyssa Davis, Economic Policy Institute, April 30, 2014
“Forgetting What Religion Is About”: When Did ‘Dependence’ Become A Dirty Word?
Too many Americans—including Christians—are afraid that helping the poor will create ‘dependency.’ They’re forgetting that’s what religion is all about.
Not long ago, I preached a Lenten sermon in which I made a lone reference to food stamps as being one of the ways we “love our neighbors as ourselves.” Judging from the reactions of a few congregants, you might have thought it was all I preached about. They went out of their way to tell me how such programs “breed” complacency, laziness, and—wait for it—dependency.
It reminded me of Rep. Paul Ryan, who’s always carrying on about America’s “culture of dependency,” and just realized a major budget proposal that would slash food stamps and other government measures that relieve the misery of the poorest Americans.
When did “dependence” become such a dirty word? We list our children on our income tax forms as “dependents” without stigmatizing them by such a designation. So why does “dependent” become an accusation when applied to other people’s children when they are in need of food stamp (SNAP) assistance, a free-school-lunch program, or housing assistance to rescue them from being homeless? Why is it wrong for someone blind, disabled, or elderly and frail to be “dependent” upon the society in which he or she lives for the basic necessities, when it is impossible for that person to provide for themselves?
And besides, it’s far from clear that a “culture of dependency” is what America has—in fact, we have something like the opposite. Independence may well be the modern day Golden Calf to which far too many of us bow down and worship. Independence is bound up in our national identity, both personal and corporate. After all, next to our Constitution, it is the Declaration of Independence to which we most often appeal. The rugged individualism which in many ways helped make our nation what it is may also be what is causing us to lose our sense of the common good.
The establishment of a social safety net is the most profoundly religious action a government can take. An underlying principle of the Judeo-Christian faith—indeed of most faith communities—is that God will judge humankind by the way we care for the most vulnerable in our midst. Think of all the people in the world we generally revere: Dr. Martin Luther King, Jr., Gandhi, Clara Barton, Nelson Mandela, Dorothy Day, Albert Schweitzer, Dag Hammarskjold, Mother Teresa. All of them, in one way or another, reached out to the poor, the disenfranchised, and the marginalized, seeking to ease their pain and help bear their burdens.
When a government sets out to seek the common good, it realizes that there will be some among us who are less able to meet all their needs, chief among them housing, food and safety. And it’s not just a few of us who find ourselves in need at some point: as Mark Rank wrote on the New York Times’ Opinionator, “nearly 40 percent of Americans between the ages of 25 and 60 will experience at least one year below the official poverty line during that period ($23,492 for a family of four), and 54 percent will spend a year in poverty or near poverty (below 150 percent of the poverty line).”
Are there undeserving, even fraudulent people receiving welfare/food/housing assistance? Undoubtedly. But as a citizen of this great nation, I am willing to fund the undeserving few who slip by unnoticed and game the system, in order to provide for the many who are truly in need. Many of our national and state legislators seem to want to use the excuse of the undeserving few to gut the social safety net altogether, and by so doing, punish the many who are in real need.
In fact, most of the people who avail themselves of the government’s (in other words, our) social safety net are indeed dependent. Some of them will remain so: children (45 percent), the disabled, and the elderly (20 percent). Many more will remain so until we get serious about offering them the kind of assistance which might lift them out of poverty, like raising the minimum wage.
In 2012, 47 percent of people who received food stamp assistance were in families where at least one person was working. These so-called “working poor” are not lying around in Paul Ryan’s imagined hammock of ease, living off others’ hard work and generally having a grand time of it. They are working one or more jobs, and because of part-time work or low wages and extreme needs, are still not able to provide adequate food and shelter for themselves and their families. Politicians who claim to be “helping” poor people by depriving them of aid are either ignorant or cruel.
For Christians are called to care for our neighbors. Telling the Good Samaritan story, Jesus teaches that all people are our neighbors. And as for a few “getting away with murder,” Jesus reminds his followers that it rains on the just and the unjust alike, and that God will sort it all out in the end. Jews, Muslims, Christians, and followers of nearly every religion believe in helping those in need. So do most humanists and atheists. We are called to respect the dignity of every human being. And yet, we witness professed Christians like Paul Ryan putting forward budgets that would eviscerate our common safety net.
It’s time religious people stood up and laid claim to their desire and responsibility to care for the poor. It’s time to withdraw the stigma and condemnation from those who by necessity must be “dependent” on the rest of us. It should be our joy to serve them.
By: V. Gene Robinson, Senior Fellow at the Center for American Progress, Washington, DC, and the Retired IX Episcopal Bishop of New Hampshire; Published in The Daily Beast, April 4, 2014
“Blowing Away The Smoke”: A Democrat-Sponsored Tax Cut Calls The GOP’s Anti-Poverty Bluff
For months now, as congressional Republicans have blocked repeated attempts to extend benefits to the long-term unemployed, as they’ve fought to deny low-income Americans access to health insurance, as they’ve advocated to cut tens of billions from the food stamp program, as they’ve resisted proposals to raise the minimum wage, they have simultaneously professed their commitment to American workers and the poor.
Senator Patty Murray put forth a new test of that commitment on Wednesday, by introducing legislation to expand the Earned Income Tax Credit. The EITC is already one of the largest and most effective anti-poverty programs, rewarding low-wage earners for their work and lightening their tax burden. It’s also one of the very few specific anti-poverty policies Republicans have praised in recent months.
Murray’s bill, the “21st Century Worker Tax Cut Act,” would increase the maximum credit for childless adults and create a new tax deduction for families with two working parents. It’s intended to complement the Democrats’ campaign for a higher minimum wage, and to force Republicans to take a real stand on help for American workers. Given their recent nods towards the EITC, one might reasonably expect Republicans to consider Murray’s proposal seriously. (President Obama also proposed an EITC expansion in his budget for 2015.) Even the tax loopholes Murray proposes closing in order to pay for the expansion have already been singled out for elimination by the Republican chairman of the House Ways and Means Committee, Robert Camp. But these are not reasonable times.
The Republican’s recent expressions of support for expanding the EITC have always seemed more opportunistic than sincere. Rather than actively working to extend the credit to more Americans, the GOP instead uses the EITC as “a protective shield against populist attacks,” as Jonathan Chait put it; specifically, as a counterpoint to calls from the left to raise the minimum wage.
“The minimum wage makes it more expensive for employers to hire low-skilled workers, but the EITC, on the other hand, gives workers a boost—without hurting their prospects,” Representative Paul Ryan said of the EITC in a January speech at the Brookings Institution. “It gives families flexibility—it helps them take ownership of their lives.”
Conservative pundits and academics have taken a similar line. Two economists at the American Enterprise Institute argued last year that “expanding the earned income tax credit is a much more efficient way to fight poverty than increasing the minimum wage.” Steve Moore of the Heritage Foundation argued in favor of a higher EITC in January, as did former Bush advisor Glenn Hubbard. Another former Bush advisor, Harvard economist Gregory Mankiw, wrote recently that the EITC was “distinctly better” than raising the minimum wage because the costs are born by taxpayers rather than employers.
In his own much-hyped poverty speech in January, Senator Marco Rubio advocated for replacing the EITC with a “federal wage enhancement” subsidy. The vague contours of the alternative he proposed suggested that what he had in mind was nearly identical to the EITC, but with more support for people without kids.
Rubio was right to point out that one of the major shortcomings of the current EITC is that it offers minimal assistance to childless workers. As the program operates now, people without children who are under 25 are ineligible, and the maximum credit for those between 25 and 64 is $487. Families with children receive more substantial benefits. In 2011, their average credit was $2,905.
Murray’s bill addresses Rubio’s professed concern for childless workers by lowering the eligibility age to 21 and raising the maximum credit for childless workers to about $1,400. Those changes would benefit thirteen million people, according to a Treasury Department estimate. The legislation also increases support for families with two working parents by allowing a secondary earner to deduct twenty percent of their income from their federal taxes. This could offset childcare, transportation, and other costs associated with entering the workforce, thus encouraging more stay-at-home parents to find jobs. More than seven million families would benefit from this new deduction, according to the Joint Committee on Taxation.
The bill also doubles the penalties for tax payers who fail to comply with the Internal Revenue Service’s “due diligence” requirement, a reform that addresses Republican concerns about the costs of improper claims.
If Republicans really wanted to use the EITC as a vehicle for boosting low wages, this legislation provides an excellent starting point for negotiation. But they’re unlikely to engage with it seriously, because their lauding of the EITC was never serious to begin with. For example, Rubio’s proposal to expand the credit for childless workers would have been accomplished by taking money away from workers with kids, instead of by increasing the size of the program overall.
Republicans will face a tricky situation if Harry Reid brings Murray’s bill up for a vote in the Senate. “If Republicans aren’t interested in supporting this bill, they’ll need to explain why they are rejecting the alternative that they have often pointed to in order to justify opposing raising the minimum wage,” a senior Democratic aide told The Nation.
If recent votes on unemployment insurance are any indication, Republicans are far more likely to risk hypocrisy and find reasons to kill the bill than do any real governing, even on policies they profess to support. If a vote doesn’t accomplish much for low-wage workers, it may at least blow away some of the smoke from the GOP’s show.
By: Zoe Carpenter, The Nation, March 26, 2014
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