Unless you have the amazing good luck of living under a rock, you have, by now, heard about Trump’s proposed budget. In a nutshell, the budget factors in the $600 billion tax cut to the wealthiest citizens resulting from the not-yet repealed ACA, slashes governmental programs across the board with an extra whack of the budget axe to those that provide assistance to the poor, and gives a nice, fat increase to defense spending.
It is a mark of Trump’s diminishing standing among his fellow party members that several GOP members of Congress have chipped in and bought themselves a spine, and declared the budget “dead on arrival.” However, the moribund status of Trump’s proposal has not prevented a spirited –nay, dare I say, feisty?—defense of this latest manifestation of Trumpism by a variety of surrogates from the Office of Management and Budget, Congress, and various “think” tanks. And from Mick Mulvaney on down, these apologists have glommed onto one particular talking point with alarming alacrity. In defending their slash and burn budget, they claim that they are “showing compassion to the taxpayer” by cutting federal programs to the bone. It is not fair, they declare, to expect hardworking middle-class tax payers to continue footing the bill for the lazy slugs who are sucking undeserved milk from a worn out public teat. Fully 45% of American households do not pay income taxes! Why should we subsidize them?
In other words, they’ve cynically split American citizenry into two camps: makers and takers. On a certain gut level, this argument seems to make sense. You work your butt off, this line of reasoning goes, so why should you pay for free breakfast and medical insurance for the illegitimate spawn of a feckless welfare queen? And the legitimacy of this position appears to be bolstered by the additional fact that approximately 45% of American households do not pay federal income taxes. But the very ire that this stance provokes in the listener—that sting from the enormity of this insulting injustice—is precisely what should make you pause and consider the legitimacy of the argument. Remember: logic is boring, dull, and analytical. It should rarely make you need to reach for an extra dose of your blood pressure medication. If an argument leaves you feeling absolutely murderous, then you need to see if it is grounded in logic, or if it is mired in knee-jerk provoking emotionalism.
So, let’s put on our Spock ears and look dispassionately at what they’re saying. Personally, I think there are at several logically sound reasons for rejecting Mulvaney’s argument.
First, that 45% figure that’s bandied about is interesting as far as it goes, but it doesn’t really go that far. For example, it doesn’t include all of the other taxes that people pay: even if you don’t pay federal income taxes, the chances are pretty great that you do pay some combination of payroll, state, property, excise, sales, sin, and gas taxes. According to Roberton Williams, an analyst for the non-partisan Tax Policy Center, the actual percentage of people who pay no taxes is actually closer to 1%.[1] Pretty much all of us are makers, as it turns out. Similarly, many of the households who didn’t pay federal income taxes had taken advantage of various deductions and credits that they were entitled to because Congress decided to use the tax code as a mechanism for carrying out important social policies, such as encouraging home ownership or giving to charities or making sure that the working poor can afford to go to work or keeping your granddad out of the poorhouse[2] or deciding that families that make less than $20,000 probably have too much shit on their plate already to worry about paying taxes. You know, compassion.
Second, let’s just look a bit at who is eating the federal pie. According to their really pretty pie chart, the Center for Budget and Policy Priorities (CBPP) found that in Fiscal Year 2015, the federal government spent $3.7 trillion, of which $3.2 trillion was from taxes and the rest from loans. In that year, 16% of the federal budget went to defense, 24% went to Social Security, 25% (or $938 billion) went to Medicare, Medicaid, CHIP[3] , and ACA marketplace subsidies, and 10% went to Safety Net programs. Debt, vets, transportation, education, science and medical research, non-security related international programs, and miscellaneous crap made up the rest of the expenses (about 25%). Now, you might tot up the Social Security, Medicare, Medicaid, CHIP, marketplace, and safety net programs and think, “Holy shit!! The poor really are sucking up all of the federal resources.” But slow down, okay? First of all, Social Security, including Social Security Disability Insurance, is an insurance program, and current recipients have contributed to the program through their payroll tax contributions. Second, of the 25% of the federal budget that went to paying for the poor’s health bill, two-thirds went to Medicare—which is available to all Americans over the age of 65, both rich and poor: all you have to do is pay in and hope you make it to 65. Social Security and Medicare are not programs for the poor.
But let’s be truly Scrooge-ish in our analysis and do our best to root out the freebooters in Granny’s nursing home. In 2015, 24% of Medicare recipients were at or under 200% of federal poverty levels. However, according to the Kaiser Family Foundation, only 41% of Medicare payments come from general federal revenues, while 38% was from pay roll taxes, 13% from beneficiary premiums, and the rest from state transfers, interests, and the ubiquitous but tantalizingly vague “other.”[4] Part A of Medicare, which covers hospital, nursing home, hospital, and home care, is the most expensive part of Medicare ($261.2 billion), and, guess what: in 2014, only 1% of the Part A bill was paid for through income taxes! The bulk of Medicare payments that were covered by federal income taxes were under Medicare B and D. These two programs totaled $338 billion, of which $253.5 billion (or 75%) is paid for by federal tax dollars.[5] So, if we assume that 24% of that $253.5 billion was spent on the elderly poor, then the total of federal tax dollars spent on the poor for Medicare B and D is $63.4 billion. Add in the $633 million the feds chip in to the poor in Medicare A (25% of $2.5 billion in federal income taxes paid under Part A), the total payments to the poor under Medicare that originated from federal income tax is $64 billion.
So, let’s add up the federal income tax dollars that were spent on the poor (in billions of dollars):
| Medicare | 64 |
| CHIP | 9.7 |
| Medicaid | 351 |
| ACA marketplace subsidies | 41 |
| Safety net programs[6] | 362 |
| Total: | 827.7 |
Now, let’s see what percentage of federal income tax dollars were actually paid directly to the poor. Taking the $3.7 trillion 2015 total budget as our starting point, I’ll immediately knock out the $938 billion in Social Security because, as I’ve pointed out before, that is funded by payroll taxes. Similarly, I’ll toss out the $343.2 billion for Medicaid that came from non-federal income tax dollars. That leaves us with roughly $2.4 trillion, of which $827.7 billion is 34%. And since in 2015 32% of Americans were at or below 200% of the Federal Poverty Level, I would be inclined to say that seems about right. And here’s a point: if you thought it was unfair for 55% of potential federal income tax payers to subsidize the 45% who don’t pay income tax, then how fair is it for 32% of the population to bear the burden of 60% of the budget cuts?
When you think about it, the middle and upper classes get quite a lot out of the budget. After all, who benefited from bank bailouts? Who gets the most benefit from agricultural subsidies and shiny new airports? I have a guess, and it isn’t the under-employed white guy living out in the country who’s about to lose his pick-up truck because he can’t make his loan payments. Furthermore, this is not taking into account the very real benefits to the rich that are not accounted for in the budget. In 2015, $1.2 trillion dollars were exempted, excluded, or deducted from potential federal income tax and payroll tax revenues. Also known as “tax expenditures,” these funds would have been enough to pay for Social Security, or Medicare and Medicaid combined, or defense and non-defense discretionary spending. In essence, because these dollars that are not captured by the federal government, they act as subsidies for the people who are eligible to claim them. While the poor benefited from the Earned Tax Credit, most tax deductions and exclusions are overwhelmingly skewed towards the wealthy[7] : according to the CBPP, 50% of tax expenditures were claimed by the top 20%.[8] But because by their very nature they are not revenue, this benefit is not reflected in the federal budget. So who’s the real piggy at the trough? Not sure, but I bet it’s the one whose chauffeur drove it to the food fest, and not the one who can’t afford the bus fare to get there.
All of this raises an important question: why focus on the poor if they represent only a third of federal income tax dollars spent? Well, for one thing, it’s easy to pick on the poor. Practically by definition, they are vulnerable to attack, lacking the education, savvy, and resources to defend themselves and their interests. And, let’s face it, we don’t really like the poor. For all our protestations about being a classless society, we have a long, extensive and fairly vile history of abusing and denigrating the poor[9]. They make us feel bad, especially when it turns out that it’s not people’s poor choices that create poverty (or even their state of mind), but ingrained societal inequities, including the failure to provide a living wage and the disproportionate impact of inherited wealth.[10] So when we’re feeling sad and scared and want to blame someone for our shitty state of affairs, the poor make a convenient whipping boy. Perhaps that’s why Trump’s budget really packs a wallop against the same white, rural, poor who voted for him.
But let’s be real here, right? We know what Mulvaney is really trying to do. He’s blowing on his dog whistle. The tendency of white Americans to associate poverty with African-Americans has been well-documented, as has its connection to attacks on welfare systems.[11] Using “poor” as a surrogate for “black” is a time-honored tradition at least since Nixon’s “Southern Strategy” in the 1968 presidential campaign—and not just for Republican presidents.[12] And nobody can blow on that particular dog whistle half as well as Donald Trump. He won not despite using overtly racist language, but because of it. So Mulvaney, by picking on the poor, by pitting hard-working “us” against shiftless, feckless “them,” is using the same tactics his boss used to such great success back in November.[13]
So what do we do? Point out that in 2015 41% of people living under the poverty line were white? Discuss how his budget will actually hurt Trump supporters the most? Convene symposia on the links between structural racism and poverty? Well, as much as I love to think that reasoned discourse would bring an end to our racial woes, I really, really, doubt it. Racism is an emotional response to the world, mired in shame, guilt, and greed, and as such is pretty immune to logic. Anybody who has had Thanksgiving dinner with their Archie Bunker uncle knows exactly what I’m talking about.
Engaging in the debate on Mulvaney’s terms will do nothing to eradicate the inherent racism of his argument, but it would actually play into his hands by deepening the chasm between Trump supporters and reasonable people and hardening the differences of our positions even more. I therefore suggest that we reject Mulvaney’s position in its entirety and refuse to participate in it at all. Instead, we need to replace his emotional appeal with one of our own. And ours, I humbly suggest, would have the double charm of being grounded in fact and patriotism. Hooray!
Here’s how it goes. While a mere 99% of households are makers, I would argue that 100% of us are takers. We don’t all take the same things, but we all take something. Some people get retirement benefits from having served our country, while others get help getting preventive medical care for their kids. Hipsters might go to an exhibit funded in part by the NEA, while little kids like going to their local libraries and museums to learn[14]. Student loans help our kids get further education, and clean water and fresh air are universally popular, even if, for some unfathomable reason, you don’t “believe” in the impact of greenhouse gasses. Nobody wants to lose their fingers at work. The National Park Service is nifty, and how would I get my giggles without the CDC’s Morbidity and Mortality Weekly Report? I don’t know about you, but I like science and medical research, and disease prevention is something I could definitely live with. Some of us need help to afford to eat, while others like to rake in agricultural subsidies . See how it works? Something for everyone. The federal budget accommodates the needs and desires of all citizens, and that’s cool because this country, like all countries, is a joint enterprise. If Justice Holmes were right, and taxes are the dues we pay for a civilized society, then the budget is the mechanism for establishing and maintaining that civilization. What we need, instead of attacking the users, is a fair and equitable means of raising tax revenues—including from the oh-so-favored top 20%.
Basically, there is a division in our country, but it is not between the makers and the takers. Instead, it is between those who see government as a means to provide for the common welfare of all its citizens and those who see it as a way to redistribute funds from the poor to the rich. Reader, I think the choice is obvious, but we need to beat our drums about it more, because there are those who will buy Mulvaney’s false dichotomy and deepen the rifts that are already dangerously close to ripping our nation apart. Sad!
©2017 D. R. Miller
[1] For a good explanation of the limitations of the 45% figure, click here.
[2] According to The Economist, in 2011, 22% of families that didn’t pay federal taxes were seniors receiving tax-exempt Social Security benefits.
[3] Children’s Health Insurance Program. Oh, those pesky kids.
[4] Figure 6 on the KFF fact sheet. The KFF fact sheet is based on FY 2014 figures, but, you know what? I’m willing to bet that the percentages are about the same for FY 2015.
[5] Part B = 259.8 billion, and Part D = $78.2 billion.
[6] These programs include SNAP, and Supplemental Security Income for the elderly or disabled poor, and unemployment insurance
[7] The disparity between the haves and have-nots is especially eye-watering when looking at who benefits from the capital gains preferences.
[8] 16.6% went to the top 1%.
[9] And if you don’t believe me, check out this light-hearted tome, the genteelly named White Trash by Nancy Isenberg . Also available on Audible for your listening pleasure.
[10] Stupid poor. Always choosing the wrong parents.
[11] See, for example, Gilens, M. “Race and Poverty in America: Public Misperceptions and the News Media” Public Opinion Quarterly, 1996, found at http://www.uvm.edu/~dguber/POLS234/articles/gilens.pdf.
[12] Bill Clinton’s campaign for welfare reform springs to mind, for example.
[13] You really need to read the National Book Award winning Stamped from the Beginning by Dr. Ibram X. Kelly of the University of Florida. I mentioned this book in my last blog, but I really can’t recommend it enough if you’re at all interested in the evolution of racist ideas and their role in justifying racist beliefs, actions, and policies.
[14] Because Christ knows they won’t be able to learn anything at their local public school, thanks to Trump’s budget!
