Most of Those Outraged by Obamacare Enjoy Big Taxpayer Subsidies Themselves

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iStock photo of tax return and US treasury check

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Why do conservatives have such a visceral hatred of a market-based expansion of health care coverage once championed by the Heritage Foundation – a scheme that their last presidential candidate called an expression of “the ultimate conservatism”?

It’s not only because it was passed by a Democratic president they loathe. According to a recent study of Republican base voters conducted by Democracy Corps, Obamacare “goes to the heart of Republican base thinking about the essential political battle.”

They think they face a victorious Democratic Party that is intent on expanding government to increase dependency and therefore electoral support… [They believe that] insuring the uninsured dramatically grows those dependent on government.

Tea Party participants, in particular, were very focused on those who claim “rights” in the form of government services, without taking responsibility for themselves.

Race, according to the study’s authors, plays an unspoken role in determining who is and isn’t counted among the “deserving” poor.

It also dovetails perfectly with the overarching mythology that animates today’s conservative movement: the belief that there exists a large group of shiftless people whose lifestyles are subsidized by an increasingly overburdened class of hard-working Americans. It’s the ‘makers versus takers’ narrative that animates the movement – from the lowliest right-wing blogger to Mitt Romney’s claim that 47 percent of Americans don’t pay taxes and refuse to take care of themselves.

It’s also complete nonsense. The reality is that virtually all Americans are, at various stages in their lives, both “makers” and “takers.”

Americans subsidize each other all the time, in dozens of ways, and the biggest beneficiaries are not the poor, but the middle class and the wealthy. But as Suzanne Mettler, a professor of government at Cornell University, found in her research, many of those receiving taxpayer subsidies don’t realize it. In fact, according to Mettler’s 2008 study, “94 percent of those who had denied using [government] programs had benefited from at least one; the average respondent had used four.”

In other words, many of those hardworking “taxpayers” outraged at the idea that they’re now being asked to subsidize health insurance for people with modest incomes themselves enjoy mortgages, health insurance, retirement accounts and other social goods that are being subsidized by other taxpayers, including those at the bottom of the income ladder.

Consider this: the subsidies that represent the heart of Obamacare (which don’t benefit the poor exclusively – a family of four making under $94,000 per year will be eligible for some help) will average $100 billion per year over the next decade, slightly less than the cost of the home mortgage deduction, which tallied $105 billion in 2011, according to Mettler. Seventy-seven percent of that subsidy flowed to households that made over $100,000 per year, according to the Center on Budget and Policy Priorities (CBPP). And Obamacare’s subsidies pale in comparison to the $177 billion we dished out to subsidize employer contributions to health insurance plans in 2011. Subsidized pensions cost us another $111 billion that year. To put all that in perspective, states and the federal government spent a combined total of $31.4 billion last year on the Temporary Assistance to Needy Families (TANF) program, which most people know as “welfare.”

Much of our hidden welfare state is obscured by design. Americans are, as Johns Hopkins political scientist Steven Teles puts it, “ideological conservatives and operational liberals.”

That is, they want to believe in the myth of small government while demanding that government address public needs and wants regarding everything from poverty and retirement security to environmental protection and social mobility…

The easiest way to satisfy both halves of the American political mind is to create programs that hide the hand of government, whether it is through tax preferences, regulation, or litigation, rather than operating through the more transparent means of direct taxing and spending.

Mettler writes that as a result of this dynamic many government programs are successfully “largely hidden from the public…”

Through them, government benefits people, providing them with opportunities and relieving their financial burdens, often without them even knowing it. Appearing to emanate from the private sector, such policies obscure the role of the government and exaggerate that of the market.

The other side of the mythology – that the “takers” don’t pay taxes – is equally as divorced from reality. It’s based on the fact that around 40 percent of the population pays no federal income taxes in a given year, largely as a result of Republican policies like the child tax credit. But the claim is the height of cherry-picking data because the federal income tax represents only around a quarter of the taxes paid in this country. When one includes all taxes, those in the bottom fifth of American households forked over around 16 percent of their incomes in taxes, and the next fifth paid 21 percent of theirs, according to CBPP. And many of those tax dollars ultimately subsidize the lifestyles of those who fancy themselves to be self-made “makers.”

It’s also the case that, contrary to the belief that people who don’t pay federal income taxes are a discrete group of Americans, most families don’t pay them for a year or two when their incomes fall below the threshold, but do pay those taxes in other years. Almost one in five people who don’t pay federal income taxes are students who will, one hopes, earn enough to pay federal income taxes when they graduate. Another fifth are seniors who paid those taxes before retirement.

It’s perverse to condemn all of these people as shiftless moochers, but that’s the foundational myth that supports most mainstream conservative thinking about government programs these days.

So here’s something to keep in mind when you hear someone grousing about being forced to help pay for health insurance for what they see as “the undeserving poor”: in all likelihood, that person has enjoyed subsidized college tuition or health insurance or home ownership or retirement plans– or any of a dozen other hidden government benefits in our submerged welfare state — and the idea of one group of Americans subsidizing another didn’t seem to be a cause of outrage then.

Joshua Holland is a senior digital producer for BillMoyers.com. He’s the author of The Fifteen Biggest Lies About the Economy (and Everything Else the Right Doesn’t Want You to Know about Taxes, Jobs and Corporate America) (Wiley: 2010), and host of Politics and Reality Radio. Follow him on Twitter or drop him an email at hollandj [at] moyersmedia [dot] com.
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  • Anonymous

    The wealthy get the benefits of corporate welfare. Those who own stock in GE which make billions, but pays no taxes, gets stock premiums. The CEO’s and big shots in GE get millions in pay and benefits.
    Same with investors in oil. Big oil also profits off drilling on public land. They get a pass on environmental damage. They not only pay no taxes, make billions in profits, but get millions back in tax rebates!
    Other companies drug, war material suppliers, communications like ATT, cable, they all buy politicians for tax favors, and regulations that favor their profit making.
    These are the Welfare Queens. Instead thieves like Romney prefer to throw the blame for welfare on the poor who are taken advantage of by big corporations.
    Look how Romney emptied the pensions of thousands of workers into his off shore accounts. He should have been prosecuted, not had the nerve to run for President of the US because he thought he “looked presidential!”.

  • Anonymous

    The bottom line is the wealthy don’t want to help the poor, even though Jesus said that they should!

  • Alexander

    This article correctly identifies that the majority of so called “conservatives” (members of the controlled opposition group- the Republican party) are blind to the majority of entitlements and government intervention. But this article fails to point out that the ideological roots of these movements are still very sound. Libertarians and social conservatives oppose growth of the government in general; pointing out the lack of knowledge that most voters have doesn’t mean that increased government spending is OK for the poor just because we also increase spending on the middle classes and rich.

  • Alexander

    …yes good idea, lets add large taxes to investment and stock profits and see the resultant economic contraction. Even a Keynsian wouldn’t support that blatant populist nonsense.

  • Anonymous

    We have done better than average I think, and we have also used:

    Subsidized state school education
    Education grants
    Subsidized college loans
    Mortgage interest deduction
    Unemployment
    Medicare and Social Security for disabled family member

    Plus the free childhood education and infrastructure we all use.

  • Anonymous

    Given that studies show the wealthy just bank their tax cuts instead of increasing their consumption, I don’t think any Keynesians would have any problem with raising taxes on investment income, even those who believe that a differential rate is necessary–it just needs to be lower than earned income in order to have the incentive.

  • strider367

    Here’s something that is always left out. State and local business subsidies. These subsidies are the lion share of ALL state and city budgets. Outspending all other so called welfare programs. Like medicare, state and local gov’t employee salaries and benefits etc. The fed’s pay these same subsidies in a massive scale as well. In the old days they were supposed to help small business’s develop in that state or local areas.

    Well these subsidies have been hijacked by big corporations a long time ago. If you could get any of these states to open their books. Especially states with republican governors and legislations. You’ve be very surprised on how much and how long they have been on the dole. You’ll also find big corps that have no presence in these states have gotten a large piece of that pie.
    In fact if you look at states with big budget deficits. You’ll find there problems are from these subsidies and not the so-called people welfare. By the way they now classify civil servants are welfare recipients. That’s right even cops and fireman are takers now.
    Take Detroit as an example. They city manager there pushes for bankruptcy. The real goal of this is get off paying all those nasty city pensions and health care. Which was already thinned to the bones. Why? So they can take that money for what? You guess it for more of these business subsidies. To old too work now, that’s just too bad for you. These corps who don’t need any of this just increased their profits thanks to this nonsense.
    The old take from the poor to give to the rich routine.
    Once upon a time congress used to give corps big tax breaks to save American jobs. For the last 10 years congress gives big tax breaks, the kind that doesn’t expire like in the old days. To corps that are making record profits. They in turn give themselves big bonuses and ship 100,000 American jobs overseas. Only in America right?

  • Rhea B. Mike

    Once I had an employee who swore that she did not get services from the local health department. She and her husband ate out at least four times a week. It appears that more information needs to be shared that shows just what benefits are being provided and to whom. Additionally, I think that the corporations should be charged back for the services that their employees use such as food stamps or SNAP since their hourly wages are so low. The information could be listed on their w-2′s and charged back to the employer.

  • Sp. J.

    This is just an ad hominem attack against those who would dare oppose the accretions of state power against liberty. Of course taxpayers paying for subsidies should take advantage of them, while supporting their abolition.

  • George Schwab

    How come multimillionaire retirees can qualify for subsidies under Obamacare, but hard working middle class people who earn $1 more than the income break points have to pay up to $10,000 more for the same coverage? Why is there no asset test for ACA subsidies? A non working couple could have a multimillion dollar home, luxury yacht, multiple vacation properties and more and as long the income they show is less than $62,040 they qualify for government subsidies. If you had $8,000,000 in a money market fund at today’s rates, your income would only be $56,000 and you qualify. A poor working couple with a combined income of $62,041 gets nothing. I guess they can always go to the boss and ask for a pay cut.

  • Anonymous

    This is a specious argument akin to “everyone spies so it’s ok” or “if you do nothing wrong you have no need to fear govt surveillance.” It doesn’t make the activity in question right or affordable.

  • Anonymous

    The reason the tax code is so voluminous is because the wealthy have used lobbyists and connections to author the tax code to favor themselves. If people are unhappy with the tax structure, they should be fighting to reform the tax code, as well as the way influence works in DC (get the money out), and not directing their anger at those savy enough to take advantage of a broken govt system, or trying to add to national spending as a “they got theirs, I want mine too” effort. Everyone is focusing on the symptoms of the disease that infects our govt instead of working for the cure. This is by design; keep the masses distracted with ancillary issues (mainly social ones), and they won’t focus on the system that produced those issues.. We need to reform govt. We need to get Citizens United overturned. We need to get corp money and lobbyists out of the system. We need to overhaul the tax code. These and other causal problems are weightier.

  • Anonymous

    We’re a rich country — it goes without saying that we can afford it.

  • NotARedneck

    Racism explains much of what is wrong with the US.

  • Will

    First of all, it’s disagreement, dissent, argument, and discourse — it’s not necessarily “anger.” Secondly, social programs are not “ancillary” as you suggest. (Isn’t it part of the same concern?)

    Getting money out of politics is huge — I agree. However, the money that concerns me even more is the money in the conservative media machine, which is able to influence public opinion in many direct and indirect ways — for example, downplaying the need to get money out of politics.

    Thanks to the overriding attitudes expressed in the mass media, today it’s considered conventional wisdom (even in some moderately liberal circles) that the idea of increasing taxes on the wealthiest is some sort of evil that needs to be stamped out. And anyone who suggests otherwise (that we may perhaps need to shift the burden in our tax system away from the poor and the middle class) is labeled a socialist. These are points of view constantly parroted in our mass media. And reminding people that the most prosperous times in our country coincided with a more equitable tax system is a topic that’s off-limits. The response is predictably: “tax and spend liberal,” and the conversation stops in its tracks out of fear that we’ll be labeled as such.

    If we want a strong and prosperous country, a healthy infrastructure, a quality educational system, a country that truly provides equal opportunity for all, and the possibility for health and happiness and a bright future, with family values that value other families in addition to our own — the only way to do this is to pay for it. There’s no other method. We’ve learned over and over that trickle down economics will not work, and that reducing taxes on the wealthiest simply leads to a higher concentration of wealth in the hands of fewer people.

    Can we stop pretending otherwise?

    As long as we continue to vote people into office who will not address these concerns (out of fear of being labeled a socialist, or a tax and spend liberal), any attempt at reforming our tax system will go nowhere. My suggestion? We need more commentators in the media who address the topic (like Joshua Holland and Blll Moyers), and we need more people reading them.

  • Anonymous

    Add to that the wealthy are wealthy at the expense of stealing from the poor, that is why they are poor!

  • Anonymous

    No such thing as populist nonsense! It was done and the whole citizenry profited –you included. The few thousand dollars you may pay in taxes sure buys you a lot more than if it was privatized.

  • Anonymous

    Yes, and there is no possibility of improvement either.

  • Anonymous

    Yes, some guy on I-25 mile 196 has a sign up saying ‘Collectivism or Freedom?’ –as if all the roads, sewers, schools, clean water, police and fire department, etc are not Collectivism. No collectivism does not scare me, privatization of the Constitution does –do not call it ‘freedom’.

  • Nebiyah7 Melody

    Until restitution is paid for all the forced free labor & atrocities committed by the ancestors of those who have inherited the benefits, then logically there can be no justice. Every seed sown brings forth a harvest of its kind. Just as Yahweh told Cain when he murdered his brother, there is much blood that cries out from the ground. The entire Universe is bringing about payment for all the injustice. Justice will prevail one way or another. Its always best someone take responsibility for the bad actions of their ancestors, do what they can to make it right, and pay for the wrongs committed rather than pretending that it never happened or ignore it with the hope that it will simply go away. Justice always catches up to the unjust, sooner or later.

  • Nebiyah7 Melody

    People should learn to be very careful how they treat the poor…because everyone is vulnerable to the hazards of life. I watched as many of the same people who worked for the welfare system that were mean and just plain nasty to the recipients who they thought to be beneath them, ended up themselves having to apply for welfare, and food stamps.

  • Nebiyah7 Melody

    Yahushua who is the True Messiyah was murdered by those who had control of the wealth. Think about it…It was the religious folk who demanded the politicians hang Him.

  • John

    Ask Charles!

  • Jonathan Yaeger

    The dogma that anyone who doesn’t like the AHA in its present incarnation is a Obama hater, racist, homophobe — whatever — is getting pretty stale. Let’s start with the fact that the law is a gimme to big pharma and insurance. And then end with the realization that what we really need is access to affordable health care itself — not the damn insurance policy. The bill does very little to control & optimize actual medical costs. There is a lot to dislike about the ACA and how it was imposed by elitists on the rest of the electorate, without throwing out the tired race card.

  • Anonymous

    So true, Neb, so true. Your life can change in a blink of an eye, disaster can strike. I wish more people could put themselves in the other guys shoes for a minute and relate to their plights, and successes.

  • Nebiyah7 Melody

    First of all let me say that you call yourself Idaho Red with an air of neck for a reason…I advise you to go see the movie “12 years a slave.” You, son, have no idea what generation I am a part of & you as a human being should never try to dismiss the experiences of any person/people of which you are obviously not a part of from the lower spectrum & have absolutely no idea of the history, if you do, your response indicates that you’ve been beneficiary to the atrocities committed…you should get educated in the area of human dignity, and the effects of atrocious acts committed against a people for many centuries which continue having a negative effect for generations upon generations. You try getting a deeply embedded wound healed without the use of anything to keep it from infection & see what you’ll get. Then understand this…what one sends around comes back around at least 100 times greater than it was sent out, it is so. Open your eyes and see but first try getting some wisdom.

  • jn

    Amen

  • jn

    Wat, my husband managed a factory for yrs, illegals worked didnt pay taxes and meantime their illegal wives were collecting food stamps, tanf, and medicaid for the family wout the husband. And before u say not so, i worked at dss while n school…it is so they had illegal ss cards bought off the street. Furthermore, their children attend public school receive free lunch and in the meantime the household is bringing more income than most middle class have. They many times have three or four male earners in the home.

  • fiwik

    They think they face a victorious Democratic Party that is intent on expanding government to increase dependency and therefore electoral support… [They believe that] ********* 40 years fighting the ” War on Poverty” and there are more impoverished than ever as they continuing voting for the ” promise” !

  • http://sanfernandocurt.com/ SanFernandoCurt

    TANF is only one of 13 programs designed specifically to benefit the poor. Total cost of these programs last year was over $630 billion.