Tuesday, March 27, 2007

Who Receives The Most Benefit From Government?

Over at Willisms, there is an interesting graph (as usual. The guy loves those things)* about which income group receives the most back from government for its tax dollar. The data weights heavily toward the premise that lower incomes receive much more back in government services than other groups do. There is merit to that.

The usual counterargument is that the rich benefit most from good government because they fortuitously live in an environment that allows them to become wealthy. There is merit to that, also.

Looking for the complementary argument that it is actually the middle-class that benefits most from government, I immediately recognised that the middle-class basically doesn’t exist under bad government/economic arrangement. The rich exist even under bad government, the poor even under bad government, but it takes a certain level of economic freedom for the middle class to even exist. So perhaps it is they who receive the most benefit from government.

It matters very much what one is measuring that the government provides to determine who is getting the most of it. Airports are given to all, but are received more by the rich. Or is it the employees of local hotels and restaurants who benefit most from the airport? Subsidised transit is offered to all, but is received more by the poor. Except commuter transit from the suburbs. Do the poor receive more police protection, because there are more policemen in their neighborhoods, or is it the wealthy and middle-class who receive more, because they have more to protect and depend on stability? Who benefits more from the military or fire department? And in the case of an ambiguous or uneven benefit such as public education, which is fine in some places and terrible in others, who gets the most bang for their buck from its existence?

Yeah, as if I’d know the answer to that.

* Willisms has a great caption contest every week also, for those who like those.


Anonymous said...

The usual counterargument is that the rich benefit most from good government because they fortuitously live in an environment that allows them to become wealthy. There is merit to that, also.

Yes, they live in an environment that allows them to become wealthy, but that is in spite of the government.

Benefiting from the Capitalist system is a benefit that's derived, not from the government, but from the American voters who insist that we keep the Capitalist system of economics.

If we quit that insistence, how long do you think it would take before the government controlled, quite literally, everything (i.e. Socialism/Communism)?

The rich get nothing from the government. In fact, when the richest 5% are paying 40% of the taxes, it is they who are paying for the airports, police, fire protection, etc. They're also paying the free ride for the "poor" and a large part of the middle class.

The "poor" in this country don't pay taxes other than sales tax. Unless they're stupid, they get all of their income taxes refunded to them...and sometimes more than they paid in!

I am far from what anyone would consider to be rich (except Democrats looking to raise taxes), but this system is extremely screwed up.

Anonymous said...

Germany had a huge middle class under National Socialism.

Ben Wyman said...

I heard it explained this way once: If you're in that top 5%, you're paying - what, 27 times as much as the average taxpayer? And maybe the police might patrol your neighborhood a little better because there's more to protect, but if you need them, the police isn't going to arrive at your house 27 times faster than they will at anyone else's. The fire department will not put out a fire at your house 27 times faster than anyone else's. The roads you drive on will not be 27 times better than anyone else's.

In America, like most places, we vilify the rich as selfish, arrogant, tight-fisted sons o' bitches, and certainly some of them, and perhaps most of them, are. But under our system everything we deal with on a day to day - the highways we drive on, the parks we visit, the city officials who look out for our interests - are essentially all paid for by the wealthy. We complain that our government is in the pockets of the wealthy as if there was any way around it.

We could have the government in our pockets if we really wanted to, but I don't feel like I'd enjoy paying that price. I'll keep asking for my cash back from the government when they'll give it to me, and let the government look after whatever issues it sees fit to look after. If that's building extra parks in wealthy neighborhoods, so be it. They're the one's paying for it.

Assistant Village Idiot said...

reddog, an excellent point. My initial response is that Germany had previously had a middle-class for at least a century, and so had skills, attitudes, and infrastructure to resurrect it after the currency collapse of the 20's. That is only a partial answer, I realize.

Perhaps totalitarianism does have advantages in the jumpstart and gets some things accomplished, which is why it looks so attractive. It worked last time. If we just crack down a little harder... With national socialism, the experiment er, was not continued to see whether it would be self-sustaining.

I also recall, though I have heard it questioned as well, that Hitler left many business decision in the hands of the businessmen, requiring only that they produce for the national glory. If you know something in this area, please pass it on.

Der Hahn said...

AVI - I'm pretty sure there is more but this is what I found with a quick google.

Assistant Village Idiot said...

Excellent article, Der Hahn