America’s Social-Welfare System Dwarfs Europe’s

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National Review:

Tomorrow, the U.S. Census Bureau will release its annual poverty report. Conventional wisdom holds that the U.S. has a small social-welfare system and far more poverty, compared with other affluent nations. But noted liberal scholars Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding challenge such simplistic ideas in their book Wealth and Welfare States: Is America a Laggard or Leader?

 

Garfinkel and his colleagues examine social-welfare spending and poverty in rich nations. They define social welfare as having five components: health-care spending; education spending; cash retirement benefits; other government cash transfers such as unemployment insurance and the earned-income tax credit (EITC); and non-cash aid such as food stamps and public housing.

 

The authors find that in the U.S., social-welfare spending differs from that in other affluent countries because it draws heavily on both public and private resources. By contrast, in Europe, government controls most of the resources and benefits. For example, in the U.S., government health-care spending is targeted to elderly and low-income persons; the American middle and working classes rely primarily on employer-provided health insurance. The U.S. government health-care system is, therefore, more redistribution.

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The Redistributive State: How Government Shifts Economic Resources from High- to Low-Income Households

 

 

 

 

This week, the U.S. Census Bureau will release its annual report on income and income inequality. Historically, the official Census figures on inequality are misleading because they fail to account for most government fiscal redistribution. The high taxes paid by affluent households are ignored, and most of the government benefits and services received by lower-income households are not counted.

But government fiscal redistribution in the U.S. is extensive: the transfer of resources from higher- to lower-income groups is a major governmental activity.

>>> Read the full report here.

The left constantly complains about inequality, calling for higher taxes and increased government spending. But before calling for even more government redistribution, it is important, at least, to understand how much redistribution currently occurs.

A new report from The Heritage Foundation analyzes total government fiscal redistribution. It follows the Census Bureau framework by ranking all households according to income and then dividing the households into five “quintiles,” each containing one fifth of households. The total federal, state, and local taxes paid and the total government benefits and services received by each quintile are then calculated.

http://dailysignal.com/2015/09/15/the-redistributive-state-how-government-shifts-economic-resources-from-high-to-low-income-households/