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Hey, Government Ain’t a Cow to Be Milked!

Yesterday’s Investor’s Business Daily (IBD) editorializes:

“It’s a matter of faith for some that tax cuts and government spending help the rich, while leaving crumbs for the poor. But as with most conventional wisdom, nothing could be further from the truth.”

IBD then uses the results of a new study from the Tax Foundation (full study requires Adobe) to point out that America’s tax code:

“is massively redistributionist, sending literally trillions of dollars into low-income homes and far less into wealthy homes. This may be good or bad, depending on your point of view, but the fact is it’s happening. And those who argue that recent tax cuts benefit the rich ignore the reality.”

Table 4 of the study, which used 2004 “household cash money income,” shows the following government spending received per dollar of taxes paid:






Household Cash Income

Government Spending per Dollar of Taxes Paid
Bottom 20%
$0 to $23,699
Second 20%
$23,700 to $42,304
Middle 20%
$42,305 to $65,000
Fourth 20%
$65,501 to $99,501
Top 20%
$99,502 and above

The IBD editorial makes a point that needs to be repeated again and again, which is:

“Once a nation of stoic, self-reliant individualists, America now seems full of people who think other taxpayers owe them something. They see the ‘system’ as a giant cow to be milked – and damn the cow . . . (and) the real shame is that there are so many myths about taxes and poverty we can’t even have an honest discussion about it.”

HT for Tax Foundation study to Neal Boortz; HT for IBD editorial to Club for Growth.


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