James Joyner and I are in broad agreement on foreign policy issues but differ a little on domestic policy and I think that difference might be explained by differing views of what is actually going on in our society, different ideas of how things actually work.
In a post yesterday James asserted:
Otherwise, our public policy would seem to have been aimed over recent decades — going back to the New Deal — toward redistribution of income from the haves to the have nots.
If only that were the case! I don’t object to government programs that help people who are genuinely in need. Although a valid complaint about such programs is moral hazard, that such programs promote dependency and poor choices, my response would be to formulate better programs. When some poor schmo is bleeding on the roadway after being run over by a car is a poor time to be worrying about moral hazard.
However, that isn’t what is actually happening and a clearer if more complex picture emerges by considering just two graphs.
The first graph illustrates taxes paid in dollars per household by income quintile. The second graph illustrates government spending in dollars per household by income quintile. Both of these graphs are from the Tax Foundation and the paper from which I captured them is just chockful of interesting information.
On the taxation side I would interpret these results as showing that our federal tax system is moderately progressive, our state and local tax systems are mildly progressive, and our net total tax system is moderately progressive.
On the spending side I would interpret these results as showing that our spending is actually pretty egalitarian. The top and bottom quintiles receive slightly more than the rest but overall, as I said, pretty egalitarian.
The net result is one in which money is redistributed from the top two quintiles to the lower three quintiles. Of course our system is redistributive. We tax the rich because they have something to tax. Since public goods like national defense and public health systems without which we could not maintain a modern society can’t be paid for on the basis of a head tax and anything other than a head tax is by definition redistributive, a redistributive system we will have.
By no stretch of the imagination is a family in the third income quintile a have not.
In my ideal system spending would be considerably less egalitarian with considerably less attention being devoted to the top four quintiles than is now. Consistent with that view, I support things like means-testing Social Security and Medicare.
There are all sorts of explanations for why we have the system we do including that it’s the price of a democratic system, it’s a method of popularizing governmental intervention, and any number of others. To some extent I think it’s like Topsy—it just grew.
But our system is not one in which we redistribute from the haves to the have nots. It’s one in which we redistribute from the top quintiles to the bottom three, largely regardless of need.