Despite high levels of inequality and wage stagnation over several decades, the United States has done relatively little to address these problems--at least in part due to public opinion, which remains highly influential in determining the size and scope of social welfare programs that provide direct benefits to retirees, unemployed workers or poor families. On the other hand, social tax expenditures--or tax subsidies that help citizens pay for expenses such as health insurance or the cost of college and invest in retirement plans--have been widely and successfully implemented, and they now comprise nearly 40 percent of the spending of the American social welfare state.&nbsp;&nbsp;In&nbsp;The Other Side of the Coin, political scientists Christopher Ellis and Christopher Faricy examine public opinion towards social tax expenditures--the other side of the American social welfare state--and their potential to expand support for such social investment. &nbsp; Tax expenditures seek to accomplish many of the goals of direct government expenditures, but they distribute money indirectly, through tax refunds or reductions in taxable income, rather than direct payments on goods and services or benefits. They tend to privilege market-based solutions to social problems such as employer-based tax subsidies for purchasing health insurance versus government-provided health insurance. Drawing on nationally representative surveys and survey experiments, Ellis and Faricy show that social welfare policies designed as tax expenditures, as opposed to direct spending on social welfare programs, are widely popular with the general public. Contrary to previous research suggesting that recipients of these subsidies are often unaware of indirect government aid--sometimes called "the hidden welfare state"--Ellis and Faricy find that citizens are well aware of them and act in their economic self-interest in supporting tax breaks for social welfare purposes. The authors find that many people view the beneficiaries of social tax expenditures to be more deserving of government aid than recipients of direct public social programs, indicating that how government benefits are delivered affects people's views of recipients' worthiness. Importantly, tax expenditures are more likely to appeal to citizens with anti-government attitudes, low levels of trust in government, or racial prejudices. As a result, social spending conducted through the tax code is likely to be far more popular than direct government spending on public programs that have the same goals.&nbsp; &nbsp; The first empirical examination of the broad popularity of tax expenditures,&nbsp;The Other Side of the Coin&nbsp;provides compelling insights into constructing a politically feasible--and potentially bipartisan--way to expand the scope of the American welfare state. &nbsp;

The Other Side of the Coin: Public Opinion toward Social Tax Expenditures

Business & Money

Ellis, Christopher

Faricy, Christopher G.

Economics

Russell Sage Foundation

How does political party control of the federal government determine changes to social policy and by extension influence inequality in America? Conventional theories show that the Democratic Party when in power produces more social expenditures and consequently less inequality. Welfare for the Wealthy reexamines the relationship between parties and social policy by recognizing the social system as divided and government spending as a choice between public spending and private subsidies. Christopher Faricy argues that both Democrats and Republicans have electoral and policy incentives to increase social spending just delivered through different policy mechanisms and targeted towards divergent socioeconomic classes. Faricy using a unique data set of federal tax expenditures shows that Republicans increase social spending through the tax code, which benefits businesses and wealthier workers. In particular, he demonstrates that increases in the level of social tax expenditures are paid for with cuts to discretionary public social spending, which taken together contribute to higher levels of inequality. This analysis has implications for who provides social services, who receives government assistance for social benefits, and income inequality in the United States.

Welfare for the Wealthy: Parties, Social Spending, and Inequality in the United States

Cambridge University Press

How does political party control determine changes to social policy, and by extension, influence inequality in America? Conventional theories show that Democratic control of the federal government produces more social expenditures and less inequality. Welfare for the Wealthy reexamines this relationship by evaluating how political party power results in changes to both public social spending and subsidies for private welfare - and how a tradeoff between the two, in turn, affects income inequality. Christopher Faricy finds that both Democrats and Republicans have increased social spending over the last forty-two years. And while both political parties increase federal social spending, Democrats and Republicans differ in how they spend federal money, which socioeconomic groups benefit, and the resulting consequences for income inequality.

See the best price to sell, buy, or rent books by Faricy, Christopher G.. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Books by Faricy, Christopher G.

See the best price to sell, buy, or rent books by Faricy, Christopher G.. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

The Other Side of the Coin: Public Opinion toward Social Tax Expenditures

Welfare for the Wealthy: Parties, Social Spending, and Inequality in the United States

Welfare for the Wealthy: Parties, Social Spending, and Inequality in the United States