How Does the Tax Foundation Determine Who Gets What From the Government?
The folks at the Tax Foundation spit out a report called “Who Pays America’s Tax Burden, and Who Gets the Most Government Spending?”. Needless to say, given its by the Tax Foundation, the rich are getting hosed and the poor are making off like bandits.
But I have a quibble. I’m wondering (since if its explained, I missed it) how they allocate government spending benefits to the various income groups. I imagine with welfare, its easy. But I think back to a post I wrote a while back (sadly, I don’t remember which one or I’d simply link to it here). I remember that when I was a poor college student, everything I owned fit in my car, and was a tangible physical object under my control. Put another way, I was the first line of defense for that property.
Now I have things like 401Ks and Roth IRAs. Intangible assets. What protects that? Its not fear of losing his job that keeps a programmer from simply moving my assets into his own bank account. Its fear of serving time in jail.
And as a person becomes wealthier, more of their assets become intangible. And even the tangible assets of the wealthy receive protection by the government. Who protects title over property from simply being expropriated by the next passing guy with a gun? An octogenarian with a lot of money? His rent-a-cop security? Please. They’d be the first ones evicting the octogenarian if there were no government.
Take away the government and society falls apart. Who gets hurt if things become a big free for all? Those whose who have the most. Who gains? Those who have nothing but take away what used to belong to the wealthy.
Put another way… those who have more benefit immensely more from the mere existence of government than those who have less. Somehow, I doubt the Tax Foundation folks have taken that minor detail into account.
If the rules of the game are set up to benefit one group and hurt another, and certainly the rules are tilted toward those with a lot of assets, what’s in it for the rest to play the game?
Andrew Chamberlain, one of the authors of the study, points out (in comments) that the way government spending benefits are allocated to the various income groups can be found in another Tax Foundation paper entitled “Who Pays Taxes and Who Receives Government Spending? An analysis of Federal, State and Local Tax and Spending Distributions, 1991 – 2004.