Monday, December 12, 2011

The 1% And Government Money

Interesting article, although with one large hole in it, from Reason, channeling Investors Business Daily:
John Merline of Investors Business Daily has published a fascinating analysis of $10 billion the government annually gives to the dreaded 1 percent:

Using IRS data, IBD found that the top 1% of income earners claimed approximately $7 billion in Social Security benefits in 2009. That year, the program paid super-rich seniors — those with adjusted gross incomes exceeding $10 million — an average of $33,000 each.

Medicare, meanwhile, paid roughly $2.6 billion in health care subsidies for the richest 1% of enrollees, based on calculations using Medicare enrollment, overall Medicare spending and premium data. (Medicare does not track spending by enrollee income.) And if you consider that 5% of Medicare enrollees have more than $1 million in savings, the amount taxpayers spend to subsidize retiree health benefits skyrockets.

The hole is that government funnels gobs of money to corporations in subsidies and bailouts, and these moneys in turn often go to the salaries and worse, bonuses, of top executives. That's a pretty large hole for Reason to miss. However, it is illuminating how our tax system and our entitlement programs, which most people seem to hold as sacrosanct and absolute do things they don't expect them to do.


Doug said...

I think one of the main reasons that Medicare and Social Security haven't been means tested is to avoid them having the stigma of welfare programs. Welfare programs are usually funded grudgingly, if at all. Social Security and Medicare, on the other hand, are generally well-regarded by the general public.

Getting your social security check is not "shameful" in the way that getting food stamps can be. And I think the absence of a means test is a big reason for the difference.

Mike Kole said...

Sure- one has to go to an office to collect the food stamps, whereas the check just comes in the mail or is direct deposited, so sure, no shameful face-to-face there. I think there is also the "I paid in, therefore I deserve to collect" mentality that isn't going away any time soon. Certainly, I have taken that tack at least rhetorically, saying that I wouldn't be the kind of fool that complies on the 'paying in' end of this thing I disagree with and not on the 'getting back' end... and then I never did collect unemployment in 2011 when I was clearly eligible. Damn principles!

All this said, I think means testing is probably one of the easiest arguments to make- easier than raising the taxes of the wealthy.