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Who’s Really On the Government Dole?

July 17, 2017

I constantly hear from my hard core Republican friends, aka Trump supporters, that they are “tired of paying for the lazy poor people who live off the government dole.”  But I quickly respond to them with a question – “Do you know which tax deductions cost the government the most money?’’  They stammer around and usually say welfare, which doesn’t even exist anymore.  So I clearly state which tax deductions cost the most money:

  1. Lower rate for capital gains
  2. Business health care deductions
  3. State & local tax deductions
  4. Mortgage Interest rate deduction
  5. Tax breaks for retirement savings

And who gets nearly 90% of these government handouts?  The top 20% of wage earners, with the top 1% absolutely killing it with these deductions.  These tax breaks are triple the amount that the bottom 50% of the country gets through deductions such as the Earned Income tax credit, child credits, health insurance subsidies, etc.  Yet the common perception in America is that the bottom 50% of America, the “working poor,” are the ones that tax most advantage of the system.

Now I am a believer in a flat tax and wiping out all deductions, but in this polarized political environment that allows legalized bribery (known as “lobbying”), there are two chances we could get a bi-partisan compromise to get this done – slim and none.