More than half of Americans receive more money in various types of government transfer payments (Medicare, Medicaid, food stamps, Social Security) than they pay in federal taxes.
According to a report released this year by the Congressional Budget Office, only the top two income quintiles in the United States pay more in taxes than they receive in government transfers.
Not surprisingly, the lowest income quintiles receive far more in transfers than they pay in taxes:
In the lowest quintile, households pay only $400 in taxes (as of 2014, the most recent data available) while receiving more than $16,000 in various types of tax-funded transfer payments.
The end result is households in the bottom three quintiles have higher incomes after taxes and transfers than they do before taxes and transfers:
The second-to-top quintile is slightly worse off after taxes and transfers, and the highest quintile is sizably worse off. In other words, the top two income quintiles are subsidizing the bottom three, and the advantage, proportionally speaking, gets larger as income goes down.
The Politics of a Majority on the Dole
The political implications of this are considerable. As Ludwig von Mises once noted, once we get to the point that a majority of the voting population receives more in benefits than it pays in taxes, then voters will demand more and more wealth be transferred to them through government programs. It will then become politically necessary to extract larger and larger amounts of wealth from a minority in order to subsidize the majority.
Market economics will become less and less popular because the voters will have realized they can — in the words of James Bovard — "vote for a living" instead of work for a living.
And the mindset that "the government" is providing the goodies and can continue to do so because it has magic powers becomes more entrenched.
And character traits like initiative and ingenuity dwindle, and post-Americans become more and more like cattle.
Let's all go join the Army and suck off of a huge governmental tit and get military discounts everywhere we go!
ReplyDeleteAnd I just love being thrown-in with the lazy & worthless amongst us when I accept my social security check and utilize Medicare.
ReplyDeleteMoo!
ReplyDeleteThere's some substantive refutation of the article's facts right there. Yes indeed!
ReplyDeleteI've repeated myself enough in other threads. Why do you keep posting this crap? Put it on facebook and see what the gen pop has to say about your views and the Republican efforts to increase the deficit and then tell us we're cattle. And you are calling my beloved grandparents and parents cattle too. I never heard them either moo or complain about cashing their social security checks. And fyi, other pension plans are in financial trouble too. And the market is currently tanking. Again!
ReplyDeleteThe reason I keep posting "this crap" is because this is one of the most important conversations for our nation to be having.
ReplyDeletePlaying the take-it-personally card ("are you calling my grandparents cattle?") strikes me as a (unsuccessful) attempt to deflect from the willful avoidance of facts presented.
And the reason I don't share more of these on Facebook is that I know from experience I'd have to wade through a tidal wave of infantile sewage about how "that money was promised to us! Congress has to find a way to come up with it!" Not to mention ad hominem attacks and people pestering me with private messages.
As the great Ben Shapiro says, facts don't care about your feelings.
Get a clue dude. Calling public reaction to your "plan" infantile sewage is not the way to influence citizens in this democracy.
ReplyDeleteAs for the other pension plans in trouble too, though of course you'd tell them to go pound sand and not look to government to solve their personal problems. Yes, old folk have feelings and worry and fear are feelings. Most of us work a whole lot harder than your ilk gives us credit for, but we know the name of your game is to rake it in while doing nothing, as the well-heeled all-together-with it investors do (problem is, many of them are real close to being crooks or for some odd reason are often perceived that way):
"In the months before midterm elections, thousands of miners, retirees, and other union members from around the Ohio Valley have joined rallies and made road trips to lobby lawmakers over the shaky financial condition of their pension funds. It’s not just miners. Workers represented by the Teamsters, Ironworkers, and the Bakery, Confectionery, Tobacco workers and Grain Millers unions are all worried about the security of their pensions. Uncertainty about pensions also played a big part in the teacher strikes in West Virginia and Kentucky.
Labor leaders are looking to Congress to help shore up shaky pension funds and they pledge to make pensions an issue when voters head to the polls in a few weeks. The issue could play a role in the region’s two competitive races for the U.S. Senate, as Democrats Joe Manchin, of West Virginia, and Sherrod Brown, of Ohio, seek reelection in historically union states that went for President Trump in 2016."
https://wfpl.org/pensions-at-the-polls-will-concern-over-shaky-plans-show-up-on-election-day/
The same dynamic is at work in these union pension funds. Retirees are outnumbering those paying in.
ReplyDeleteAnd even the government agency set up to deal with unfunded pensions, the Pension Benefit Guarantee Corporation, is on shaky financial ground.
And there are obviously a lot of wealth-management advisors who do a great job, as evidenced by the satisfied customers continuing to do business with them.
This is exactly what I mean by the cattle mentality: the notion that somebody else can take charge of your destiny for you.
ReplyDeleteWe are talking about broken promises. Cattle are lucky. They don't know what promises are. And you have way more "faith" in wealth management advisors than most reasonable people do. If we're cattle you're a clueless little lambikin, baahhh!
ReplyDelete"Advisors need to prepare themselves for a nasty eventuality that looks like a near certainty when the market next crashes. According to a top wealth management lawyer, there are likely to be a great deal of lawsuits filed by clients against their advisors whenever the next big crash comes. The lawsuits will be focused on claims of reverse churning, or that advisors put client money in fee-baseds account in order to collect fees without offering significant advice or trading. Since switching clients into fee-based accounts (versus commission-based accounts) has been a very common practice over the last several years, the atmosphere is ripe for a massive wave of lawsuits."
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ReplyDeleteThe ones that deliver and satisfy their clients will benefit from this.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteWonder what percentage that will be? Of the uber-humans transcending the bovine masses, at least until genetic engineering brings us more. Oh to become an uber-human investment counselor. Of course when the going's good, everybody's advisor is the best, just like when it's not so good, then everyone's lawyer is the greatest. I'm sure they are drooling for the opportunity to snake in on the privatization of social security, as if that will ever occur without blood on the streets.
ReplyDeleteObviously it's a high enough percentage to keep the investment advising industry in business.
ReplyDeleteThey want more though, right, they want at our OASI $$$.
ReplyDelete"Financial misconduct is widespread within the financial industry, with one in 12 financial advisors in the U.S. censured for abuses. ”These things are not frivolous,” says Mark Egan, an assistant professor of finance at Harvard Business School and a co-author of the study. “The average settlement is in excess of $100,000 and the median is $40,000. These are costly offenses.”
https://www.forbes.com/sites/hbsworkingknowledge/2018/01/09/the-startling-percentage-of-financial-advisors-with-misconduct-records/#741f35592565
From a recent article in the Chicago Tribune, 6/8/18:
ReplyDelete"Your financial adviser may make as much money from your retirement account as you do. That’s what happens when advisers put you into mutual funds that perform well but charge excessive fees along the way. Those fees can add up — especially when you consider what you could have earned along the way."
http://www.chicagotribune.com/business/success/terrysavage/tca-retirement-account-fees-take-big-bite-over-time-20180605-story.html
Re: the 1 in 12: Good business for the 92 percent that has integrity and a desire to be a partner with their clients in achieving the client's financial goals.
ReplyDeleteRe: fees: It's up to each individual investor to decide if that is objectionable.
Those are just the ones that got caught.
ReplyDeleteNext meltdown is predicted for 2020.
ReplyDeleteIf you'd limit your beefs to Medicaid and food stamps I'd agree with you. Social Security and Medicare are, yes indeed, in this democracy at this time, indeed, off limits, though wills will find a way because Medicare is nothing without all the supplemental coverages. I presume you have entered the demographic by now. And are you taking your OASI now or receiving spousal bennies?
ReplyDeleteMy particular situation is not the issue here. Something must be done about SS prior to 2034, and the only ideas from the Left involve raising taxes of some sort.
ReplyDeleteOff the table.
Raising taxes? A good start is merely rescinding the corporate tax cut. OASI will be saved
ReplyDeleteWe've covered that. Raising corporate taxes would bring economic growth to a halt. And it would not even begin to save OASI.
ReplyDeleteNot raising corporate taxes, bringing them back in line. Cutting income before expenses is idiotic. I know it is supposed to stimulate economic growth, but talk to me after the next meltdown which might be coming sooner than we think regardless.
ReplyDelete