Who Pays? And for What? And Why?

I found this piece by Barry Eidlin in The Nation thought-provoking:

So the question before us is not whether we can afford to pay for new social programs and benefits. It’s how to best cover social expenses that Americans are already paying for.

There are three possible answers to the question of who pays for social expenses. First, governments can pay by taxing their citizens to fund social programs. Second, employers can pay by using corporate revenues to provide employment-related benefits. Third, individuals and families can pay out of pocket, rely on unpaid labor from friends and relatives, or make do without.

For much of the twentieth century, the United States had a workable answer to the “Who pays?” question that drew on a mix of all three sources. Government provided certain social benefits like Social Security, Medicare, and public education. Aided by government tax incentives, many employers offered a wide range of benefits like health insurance and pensions, creating what political scientist Jacob Hacker refers to as a “public-private welfare regime.” And with one-third of the labor force unionized, and even nonunion employers pressured to match union-scale wages and benefits, many workers earned enough to support their families and handle the social expenses not covered by government- and employer-based programs.

which I found oddly skewed. So, for example, I think a better characterization of the trio of revenue sources in the second paragraph would be:

• taxpayers
• customers and employees
• individuals and families

At this point “taxpayers” means one or both of two things: workers who pay FICA and the top 10% of taxpayers who pay personal income tax. My understanding is that the top 10% of income earners presently pay 71% of all personal income taxes broken down as Top 1%—40% of taxes; next 4%—20% of taxes; next 5%—11% of taxes. I’ve already given my definition of “the rich”. I use the term to describe people in the top .1% of income earners who derive most of their income from the ownership of assets. I honestly have no idea to whom the Biden Administration are referring to as “the rich”.

If the Administration means the same thing I do, I’m honestly curious how they plan to increase taxes on that group. IMO federal wealth taxes are unconstitutional and I’m skeptical that increasing the top marginal rates will have much effect. Congress’s power is largely derived from how it allocates tax breaks and I’m confident that it won’t surrender that power eagerly. “Tax the rich!” may be a crowd-pleasing slogan but it’s easier said than done.

I don’t oppose paying more taxes to help those genuinely in need but I do have a problem paying more in taxes to subsidize lifestyles. My reading of circumstances today is that most of the people in genuine need today live in rural areas and on Indian reservations. Subsidizing childcare costs right up into the highest quintile of income earners is not helping people in need—it’s subsidizing their lifestyles. A decade ago I would have supported federal subsidies for rural broadband but, now that private companies are already satisfying that need, I think it’s behind the curve.

In the absence of an expansion of the supply of healthcare I think that additional subsidies for healthcare will have the perverse effect of increasing healthcare prices for reasons I have already explained.

That leaves me with the question of why should we be increasing the amount of “social spending”? Is the problem that we don’t spend enough or that we aren’t getting value for what is spent?