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Oct 02 2013

Trickle up economics

It is extraordinary how in the US, contrary to what you read about the ‘makers and takers’, it is the rich who are subsidized by everyone else

Via reader Norm, I learned about this article that argues that the average American pays $6,000 in subsidies to big business.

Meanwhile reader Peter sent me this analysis by the Center for Budget and Policy Priorities that shows how the home mortgage deduction was initially created (or at least advertised) as a means to encourage and enable home ownership by lower income but now is a massive subsidy to the rich.

The main reason is that the bulk of its benefits go to higher-income households who generally could afford a home without assistance: in 2012, 77 percent of the benefits went to homeowners with incomes above $100,000. Meanwhile, close to half of homeowners with mortgages — most of them middle- and lower-income families — receive no benefit from the deduction.

As Peter points out, Republicans are always eager to apply even more onerous means tests to things like SNAP benefits that benefit the poor but when it comes to giveaways to the rich, there are no calls for such tests, even though they make so much sense.

3 comments

  1. 1
    Marcus Ranum

    And why is the tax code set so that capitalists’ use of capital is tax-preferred? I mean, other than for the convenience of the capitalists? If the capitalists are actually using their capital to create new jobs and businesses (rather than just collecting rent/interest) then they ought to be realizing the profits from that – so why give them a huge break on “capital gains”? Oh, right, let me guess – the rich wrote the tax code?

  2. 2
    Loqi

    Well, if we don’t give the job creators our money, how are they going to create jobs? And how will you survive if all the makers decide to leave our communist dystopia, create their own society of all makers, and take all our jobs with them? Huh? Answer that, Hollywood librul elite!

  3. 3
    Al Dente

    Marcus Ranum @1

    Remember the Golden Rule: He who has the gold makes the rules.

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