Brace yourself for some old-fashioned class warfare in the months ahead. With a full roster of liberals running for president in 2008, some sharp contrasts will be drawn between the "haves" and the "have-nots" -- red-hot rhetoric designed more to anger than to educate.
Some politicians thrive on such talk. They insist that in America, the rich exploit the poor, who must scrounge for the lowly crumbs that fall from the table of life's banquet. A new paper from The Heritage Foundations Robert Rector eschews the emotion of the stump speeches and takes a hard look at the facts. Rector actually does the math, and the numbers reveal that middle class and wealthy Americans actually pay many of the bills for other folks.
In careful detail, Rector breaks down the amount of money that government (federal, state and local) spends per household: $32,706. Some of this is what Rector calls "direct benefits," such as Social Security and Medicare. Some of it is "means-tested benefits," including programs more typically viewed as "welfare" -- food stamps, public housing, etc. Then we have public schools, police and fire protection, roads -- the list goes on. I won't reproduce it all here, but suffice it to say that Rector has itemized the bill quite thoroughly.
The bottom line: If you add up every category of government expenditure, you find that what Rector calls "low-skill households" -- those headed by persons without a high-school diploma -- get $32,138 in annual benefits. And what do they pay? The total federal, state and local taxes paid by low-skill households in 2004 (the most recent year for which the figures are available) came to $9,689.
To really put that in perspective, consider that the average income of low-skill households is $20,564 – which, if you do the numbers, means those households are getting roughly $1.50 in benefits and services for every $1 they earn in income.
And we're supposed to believe politicians who want to demonize the middle class and wealthy?
But wait, some people may say, not every low-skill household is going to extract $32,138 annually. A household receiving Social Security benefits, for example, probably won't also be using the public schools, at least not at the same time. True enough. As Rector readily states, the $32,138 figure is a composite average. Some will cost less. But it's also true that some will cost more. Moreover, it is an accurate portrayal of low-skill households as a group. And as a group, they plainly cost much more in public benefits and services than they pay in taxes.