"The Hunger Games" takes place in a dystopian future in which child representatives from various districts are forced to fight to the death. A few of the children come from districts that have been training them to compete all of their lives, and they are pre-selected for the games. The others are selected randomly. So while in theory anyone can win, for the most part the pre-selected do.
If a child is pleasing to the crowd, however, a sponsor might send her food, supplies or magical medicine and potentially alter the outcome of the games.
Now, imagine for a moment that the contest requires players to scale a mountain wall. The higher they climb, the more magical energy juice is available to them. Without interference, the pre-selected children quickly win, while the randomly selected simply fall to their deaths.
But then sponsors jump in and start to alter their prospects. They provide the randomly selected with energy juice right from the start and thus they no longer fall. But they don’t catch up to the pre-selected children, because for every extra cup of energy juice they receive, the pre-selected also receive one, and sometimes two. So they still get up the mountain faster, where there is naturally more juice from which they benefit.
Something like this imaginary game is going on when we try to evaluate the success of the welfare state. On the one hand, sponsor-sent energy juice (welfare) has kept people from falling off the mountain, and from living in greater misery. On the other hand, it hasn’t closed the gap between the most vulnerable and the advantaged, but not for the reasons we typically ascribe. Instead, it hasn’t closed the gap in part because it gives more to those who need it least.
This counter-intuitive fact – that our welfare state re-distributes more to the well-off than to the poor – is hidden from view, however, because wealth buys respectability. When government handouts help the wealthy to enlarge their nest eggs or the middle class to buy big homes, we see it differently than if they put food on poor people’s table or help pay their rent. The shame, it seems, isn’t the help. The shame is working for less money instead of for more.
Tax incentives for the creation of private retirement pensions, for example, appear universal, and thus aren’t seen as a form of re-distribution. But they help wealthy professionals, not those who work for minimum wage. As Christopher Howard notes, their universalism is “phony.” Three quarters of those who benefit from such incentives earn over $120,000 a year. That’s a different kind of means test – you have to have more to get more.
The home mortgage interest deduction helps wealthy and middle class families almost exclusively, encouraging them to invest in luxurious homes, subsidized in part by taxpayers who will never be able to afford a home. (As The Atlantic reports, “Less than 40 percent of the bottom quintile owns a home, compared with 90 percent at the top. As a result, the top quintile outspends the bottom on housing by $21,000 a year that gap alone is basically the entire budget of a lower-income family.”) And these deductions amount to four times what is spent on subsidized housing for the poor.
Moreover, despite all the noise over who does and does not pay income taxes, Economist magazine has calculated that when all taxes are considered (payroll taxes, etc.), the share paid by the top 1 percent and the bottom 20 percent is close to their pre-tax income.
Even our entitlement programs are skewed, with the richest fifth of Americans benefitting from 10 percent of the spending, the middle three-fifths from 60 percent, and the poorest fifth from 30 percent. But put the two together – tax breaks and entitlement spending – and (in the words of the Economist) America looks downright “perverse ... The government lavishes more dollars overall on the top fifth of the income distribution than the bottom fifth.”
Howard calls it “Robin Hood in reverse.” This, he explains, “is how the United States can spend a ton of money on its welfare system and yet make fewer inroads against poverty and inequality than other affluent nations.”
Mary Barker teaches political science in Salt Lake and Madrid, Spain.