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Matthew Desmond: Poverty, by America (EBook, 2023, Penguin Books Ltd.)

The United States is the richest country on earth, yet has more poverty than any …

This is a case where the packaging is just as important as the gift, and I don’t doubt that the way benefits are delivered and taxes are collected affects how we see them. Paying taxes does hurt, and perceiving a tax break as fundamentally different from government aid is easy to do. But it’s a bit of magical thinking. Both welfare checks and tax breaks boost a household’s income; both contribute to the deficit; and both are designed to incentivize behavior, like seeing a doctor (Medicaid) or saving for college (529 plans). We could flip the delivery system to achieve the same ends, extending welfare to the poor by cutting payroll taxes for low-income workers (as France has) while replacing the mortgage income deduction with a check mailed out to homeowners each month. The federal budget is a giant circle of money, a whirl of funds flowing to the state from taxpayers and back to taxpayers from the state. You can benefit a family by lowering its tax burden or by increasing its benefits, same difference.

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