Current Events > More than Half of America Gets More in Welfare than it Pays in Taxes

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FLUFFYGERM
10/24/18 4:37:07 PM
#1:


More than half of Americans receive more money in various types of government transfer payments (Medicare, Medicaid, food stamps, Social Security) than they pay in federal taxes.1

According to a report released this year by the Congressional Budget Office, only the top two income quintiles in the United States pay more in taxes than they receive in government transfers.

Not surprisingly, the lowest income quintiles receive far more in transfers than they pay in taxes.

In the lowest quintile, households pay only $400 in taxes (as of 2014, the most recent data available) while receiving more than $16,000 in various types of tax-funded transfer payments.

The end result is households in the bottom three quintiles have higher incomes after taxes and transfers than they do before taxes and transfers.

The political implications of this are considerable. As Ludwig von Mises once noted, once we get to the point that a majority of the voting population receives more in benefits than it pays in taxes, then voters will demand more and more wealth be transferred to them through government programs. It will then become politically necessary to extract larger and larger amounts of wealth from a minority in order to subsidize the majority.

Market economics will become less and less popular because the voters will have realized they can in the words of James Bovard "vote for a living" instead of work for a living.


These findings don't always apply at the level of the individual household, of course. In the middle quintile, especially, we'll find some households that are indeed worse off after taxes and transfers than before. This will especially be the case for households that do not yet receive old-age benefits such as Medicare and Social Security. Those households are currently being taxed to pay for current recipients of SS and Medicare. Later, however, those households will begin to receive those benefits. And, over a lifetime, they're likely to receive more in benefits than what they "paid in."2 This notion of "paying in," however, is pure fiction, and there is no "trust fund" for old-age benefits, and all benefits received at any given time are funded via taxation of current wage earners.


https://mises.org/wire/more-half-america-gets-more-welfare-it-pays-taxes
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Damn_Underscore
10/24/18 4:38:35 PM
#2:


Sounds like a good life plan, hooray for living in a 1st world country
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A_Good_Boy
10/24/18 4:39:08 PM
#3:


They should probably be paid more, then.
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The Trent
10/24/18 4:39:50 PM
#4:


sure, take all my money, strangers!
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darkphoenix181
10/24/18 4:40:02 PM
#5:


FLUFFYGERM posted...
The political implications of this are considerable. As Ludwig von Mises once noted, once we get to the point that a majority of the voting population receives more in benefits than it pays in taxes, then voters will demand more and more wealth be transferred to them through government programs. It will then become politically necessary to extract larger and larger amounts of wealth from a minority in order to subsidize the majority.

Market economics will become less and less popular because the voters will have realized they can in the words of James Bovard "vote for a living" instead of work for a living.


Pay more for work done would be a solution you know.
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davyheinz
10/24/18 4:40:56 PM
#6:


This is what happens when people dont receive fair wages.
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FLUFFYGERM
10/24/18 4:41:38 PM
#7:


Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?
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darkphoenix181
10/24/18 4:45:18 PM
#8:


FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?


Working longer hours is just a cop out to not have to hire another person.

If a job requires more than 40 hours a week to get done, you should hire another person to do the work of the person when they home asleep.

This would make more jobs open up.
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davyheinz
10/24/18 4:47:26 PM
#9:


FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?

Did you just realize that people can vote against crony capitalism to try getting what they want instead of throwing themselves at the mercy of the rich? We all fucking knew that already.
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A_Good_Boy
10/24/18 4:48:18 PM
#10:


FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?

The productivity of American workers has been rising for decades already. Maybe it's time to pay them more instead of squeezing more blood out of that stone.
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Megaman50100
10/24/18 4:50:02 PM
#11:


darkphoenix181 posted...
FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?


Working longer hours is just a cop out to not have to hire another person.

If a job requires more than 40 hours a week to get done, you should hire another person to do the work of the person when they home asleep.

This would make more jobs open up.

I agree, which is kinda why I like the idea of a maximum wage.
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Giant_Aspirin
10/24/18 4:52:51 PM
#12:


when corporations pay people so little that said people qualify for food stamps, medicaid, public housing or any other form of welfare, it means we're basically subsidizing corporate profits via handouts to their workers

solution? pay people a living wage and they won't qualify for welfare/handouts

we should stop subsidizing the profits of hugely profitable corporations (like Wal-Mart)
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Balrog0
10/24/18 4:53:09 PM
#13:


makes sense

FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?


Medicaid and CHIP constitute 70% of the income that went to households through means-tested transfers, so I think the idea would be to work to pay for stuff like a roof over your head

the next highest transfer was SNAP, accounting for 10% of means-tested income
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Annihilated
10/24/18 4:53:44 PM
#14:


darkphoenix181 posted...
FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?


Working longer hours is just a cop out to not have to hire another person.

If a job requires more than 40 hours a week to get done, you should hire another person to do the work of the person when they home asleep.

This would make more jobs open up.


Only if they have the money for those additional higher paying jobs, which many employers don't. I think it costs twice as much to staff a $30k employee than they actually make, if I recall.

Megaman50100 posted...
I agree, which is kinda why I like the idea of a maximum wage.


What the hell would a maximum wage do to accomplish this, or anything?
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hollow_shrine
10/24/18 4:55:05 PM
#15:


A_Good_Boy posted...
They should probably be paid more, then.

davyheinz posted...
This is what happens when people dont receive fair wages.

This.

If they could pay the higher tax rate, they probably wouldn't need to be on welfare.
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kingdrake2
10/24/18 4:55:21 PM
#16:


mininum wage won't help for shit in high price apartment market.
benefits work on a sliding scale. make too much you don't get help

even then there's factors on how much you pay for housing and bills related to housing = benefits per month.
utilities being weighted higher than the actual housing costs.
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username191
10/24/18 4:56:07 PM
#17:


I find the topic title kind of confusing. Why would most people who receive benefits pay more in taxes than they receive? Benefits-received taxes don't make any sense...
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Damn_Underscore
10/24/18 4:58:27 PM
#18:


Maximum wage means that workers are screwed, business owners benefit greatly.
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FLUFFYGERM
10/24/18 4:59:57 PM
#19:


username191 posted...
I find the topic title kind of confusing. Why would most people who receive benefits pay more in taxes than they receive? Benefits-received taxes don't make any sense...


That isn't the problem in itself. The problem is how it incentivizes the constant expansion of those entitlements regardless of any changes in compensation, and how it creates a society where people who could work and earn their own keep instead choose to stagnate and just rely on redistribution of wealth.
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Giant_Aspirin
10/24/18 5:01:47 PM
#20:


some other interesting things to note

red states take much more than they pay WRT welfare

https://www.apnews.com/2f83c72de1bd440d92cdbc0d3b6bc08c

Welfare does not make people lazy: https://www.theatlantic.com/business/archive/2018/03/welfare-childhood/555119/

And now, across the world, a fleet of studies are converging on the consensus that even radical welfare programsincluding basic-income programs and what are called conditional cash transfersdont make people any less productive.
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Balrog0
10/24/18 5:04:56 PM
#21:


FLUFFYGERM posted...
username191 posted...
I find the topic title kind of confusing. Why would most people who receive benefits pay more in taxes than they receive? Benefits-received taxes don't make any sense...


That isn't the problem in itself. The problem is how it incentivizes the constant expansion of those entitlements regardless of any changes in compensation, and how it creates a society where people who could work and earn their own keep instead choose to stagnate and just rely on redistribution of wealth.


again, literally 70% of this 'income' is medicaid and CHIP...

who are these folks that are purposely not working to stay on Medicaid? They exist, but they aren't who you seem to think they are, because they are disproportionately likely to be ill and have complex medical needs that they would be unable to afford on private insurance/ESI

now, maybe it's not fair that poor people can afford certain health care that middle class folks can't afford, but it doesn't have the impact on productivity you seem to be implying it would. in fact, the evidence suggests medicaid expansion lead to increases in the labor force participation rate in states that elected to do it
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P4wn4g3
10/24/18 5:20:19 PM
#22:


Proudclad really going all out with bait topics today.

You know how abysmal unemployment is? They cap it at like 10k.
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X-Pac_Heat
10/24/18 5:21:36 PM
#23:


And here comes 14k more to add to the list
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Balrog0
10/24/18 5:22:27 PM
#24:


P4wn4g3 posted...
Proudclad really going all out with bait topics today.

You know how abysmal unemployment is? They cap it at like 10k.


unemployment benefits were not included as a transfer. most of medicare, social security, and unemployment are included as part of your pre-tax and transfer income, because you pay into them.

I actually think that's sort of a silly distinction with respect to medicare specifically, especially since they aren't including part D as a pre-tax/transfer income for some reason, but oh well
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DifferentialEquation
10/24/18 5:24:22 PM
#25:


A_Good_Boy posted...
FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?

The productivity of American workers has been rising for decades already. Maybe it's time to pay them more instead of squeezing more blood out of that stone.


That doesn't mean they're working harder. Technology has made a lot of jobs safer and easier and allows each individual to produce more, that doesn't mean that the individuals necessarily deserve more.
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Giant_Aspirin
10/24/18 5:26:45 PM
#26:


Balrog0 posted...
again, literally 70% of this 'income' is medicaid and CHIP...


seems like the article in the OP might be a little intellectually dishonest
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iPhone_7
10/24/18 5:29:04 PM
#27:


Americans live to work, not work to live.
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DarthGravid
10/24/18 5:29:40 PM
#28:


Most of these people are also working full-time. So that means that the issue is wages.

But the same people that complain about these "entitlement programs" oppose any wage increases.

So the solution is to cut the programs so that the working people on them will be free to find some other way to feed and provide healthcare for their families. Maybe they should get second or third jobs. They just aren't working hard enough, that's all.

Or pay a fair wage.

Definitely one of those.
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Balrog0
10/24/18 5:33:33 PM
#29:


DarthGravid posted...
But the same people that complain about these "entitlement programs" oppose any wage increases.


FWIW, something being an entitlement program just means that anyone who qualifies is automatically 'entitled' to get it. It isn't something you call anti-poverty programs generally.

For instance, housing assistance is not an entitlement because you are not entitled to get it just because you are low-income. It is limited by funding, which means it is first come first served.

An example of an entitlement program that doesn't help the poor would be the crop subsidies that are regularly included in the farm bill that also funds SNAP (another entitlement)
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TrevorBlack79
10/24/18 5:39:44 PM
#30:


davyheinz posted...
This is what happens when people dont receive fair wages.

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ScazarMeltex
10/24/18 5:41:43 PM
#31:


DifferentialEquation posted...
A_Good_Boy posted...
FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?

The productivity of American workers has been rising for decades already. Maybe it's time to pay them more instead of squeezing more blood out of that stone.


That doesn't mean they're working harder. Technology has made a lot of jobs safer and easier and allows each individual to produce more, that doesn't mean that the individuals necessarily deserve more.

As someone who has worked on a factory floor 5-6 days a week for the last 17 years I can tell you don't have the slightest clue what you are talking about.
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KingCrabCake
10/24/18 5:41:51 PM
#32:


But the rich are the greedy ones
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EdgeMaster
10/24/18 5:42:20 PM
#33:


Giant_Aspirin posted...
when corporations pay people so little that said people qualify for food stamps, medicaid, public housing or any other form of welfare, it means we're basically subsidizing corporate profits via handouts to their workers

solution? pay people a living wage and they won't qualify for welfare/handouts

we should stop subsidizing the profits of hugely profitable corporations (like Wal-Mart)


Yeah thats definitely not the solution. Your argument falls flat on its face when you realize that $1200 gross income per month is the cap for food stamps.

That means if you make $10/hr and work full time.... you are not eligible for food stamps.

Which in turn means.... if you are working hard and trying to help yourself, you cannot get food stamps.

And yes, I realize $10/hr is shit pay under the poverty line and youll have a hard time affording 25c wing night if you want to make rent that month.
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FLUFFYGERM
10/24/18 5:43:39 PM
#34:


ScazarMeltex posted...
As someone who has worked on a factory floor 5-6 days a week for the last 17 years I can tell you don't have the slightest clue what you are talking about.


Why are you still working 5-6 days at a factory after 17 years? Why haven't you either moved up in that company or moved up into a better career? 17 years is a long fucking time to be doing the same thing.
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DifferentialEquation
10/24/18 6:03:37 PM
#35:


ScazarMeltex posted...
DifferentialEquation posted...
A_Good_Boy posted...
FLUFFYGERM posted...
Why work longer hours and seek the roles that compensate more when you can just vote to have the wealth redistributed to yourself?

The productivity of American workers has been rising for decades already. Maybe it's time to pay them more instead of squeezing more blood out of that stone.


That doesn't mean they're working harder. Technology has made a lot of jobs safer and easier and allows each individual to produce more, that doesn't mean that the individuals necessarily deserve more.

As someone who has worked on a factory floor 5-6 days a week for the last 17 years I can tell you don't have the slightest clue what you are talking about.


I said "necessarily". That doesn't mean that a pay increase is never warranted. It means I don't agree with "productivity is higher, therefore wages should be higher" as a blanket statement.

Cashiers are more productive today than they were years ago. They now run things across a scanner instead of manually keying everything in, they have scales built in their registers, they don't have to remember the specials because the computer does it for them, a lot of times they don't even need to count change. A cashier can serve customers much faster than a cashier could 50 years ago. They're far more productive, but the job is easier and requires far less skill. Do they deserve higher pay because of the increased productivity due to technological innovations?
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DarthGravid
10/24/18 6:18:12 PM
#36:


Balrog0 posted...
DarthGravid posted...
But the same people that complain about these "entitlement programs" oppose any wage increases.


FWIW, something being an entitlement program just means that anyone who qualifies is automatically 'entitled' to get it. It isn't something you call anti-poverty programs generally.

For instance, housing assistance is not an entitlement because you are not entitled to get it just because you are low-income. It is limited by funding, which means it is first come first served.

An example of an entitlement program that doesn't help the poor would be the crop subsidies that are regularly included in the farm bill that also funds SNAP (another entitlement)


*The " " " " around the term was intended to convey sarcasm toward those that use term in this context in a serious manner. Side effects may vary.

*Her*
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Rexdragon125
10/24/18 6:48:34 PM
#37:


FLUFFYGERM posted...
The political implications of this are considerable. As Ludwig von Mises once noted, once we get to the point that a majority of the voting population receives more in benefits than it pays in taxes, then voters will demand more and more wealth be transferred to them through government programs. It will then become politically necessary to extract larger and larger amounts of wealth from a minority in order to subsidize the majority.

Whoops, legislation already favors the rich by far. Wasn't Proudclad in favor of UBI? Whatever at the time works best as bait I guess
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Joeydollaz
10/24/18 6:49:21 PM
#38:


You get your tax money back in April...

why people cry over this?
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Annihilated
10/24/18 7:22:20 PM
#39:


Joeydollaz posted...
You get your tax money back in April...

why people cry over this?


You get your EXCESS tax money back in April. Many people, usually wealthy people, end up owing money to the IRS.
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A_Good_Boy
10/24/18 7:23:58 PM
#40:


Annihilated posted...
Joeydollaz posted...
You get your tax money back in April...

why people cry over this?


You get your EXCESS tax money back in April. Many people, usually wealthy people, end up owing money to the IRS.

boo hoo them. Maybe they should trade places with the poor.
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Annihilated
10/24/18 7:26:50 PM
#41:


A_Good_Boy posted...
Annihilated posted...
Joeydollaz posted...
You get your tax money back in April...

why people cry over this?


You get your EXCESS tax money back in April. Many people, usually wealthy people, end up owing money to the IRS.

boo hoo them. Maybe they should trade places with the poor.


Woosh.
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ScazarMeltex
10/24/18 9:08:54 PM
#42:


FLUFFYGERM posted...
ScazarMeltex posted...
As someone who has worked on a factory floor 5-6 days a week for the last 17 years I can tell you don't have the slightest clue what you are talking about.


Why are you still working 5-6 days at a factory after 17 years? Why haven't you either moved up in that company or moved up into a better career? 17 years is a long fucking time to be doing the same thing.

I've worked my way up and then back down (self demotion because I wasn't interested in putting the company before my family). I enjoy the work I do, the people I work with, and I don't consider myself above manual labor. Plus we're actually 4 ten hour days now, so having fridays off is nice.
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sktgamer_13dude
10/24/18 9:19:25 PM
#43:


Wow you mean having wages not grow with inflation is a bad thing and more and more people will be taking out more than theyre able to put in?

Fucking SHOCKER
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SubtletyRefuge
10/28/18 9:42:41 PM
#45:


Murica
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