Hostname: page-component-78c5997874-fbnjt Total loading time: 0 Render date: 2024-11-05T15:17:43.309Z Has data issue: false hasContentIssue false

Tax “Expenditures” and Welfare States: A Critique

Published online by Cambridge University Press:  27 April 2011

Monica Prasad*
Affiliation:
Northwestern University

Abstract

Image of the first page of this content. For PDF version, please use the ‘Save PDF’ preceeding this image.'
Type
Critical Perspectives
Copyright
Copyright © Donald Critchlow and Cambridge University Press 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

NOTES

1. Surrey, Stanley S., “Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures,” Harvard Law Review 83 (1970): 705–38CrossRefGoogle Scholar; Surrey, Stanley S., Pathways to Tax Reform (Cambridge, Mass., 1973)CrossRefGoogle Scholar; Lubick, Donald C., “A View from Washington,” Harvard Law Review 98 (1984): 338–40.Google Scholar

2. Pozen, David, “Tax Expenditures as Foreign Aid,” Yale Law Journal 116 (2007): 869–81, 877–78.CrossRefGoogle Scholar

3. Howard, Christopher, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton, 1997).Google Scholar

4. Ibid., 9.

5. Hacker, Jacob, The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (Cambridge, 2002).CrossRefGoogle Scholar

6. See Howard, The Hidden Welfare State, 191.

7. Howard, Christopher, “Making Taxes the Life of the Party,” in The New Fiscal Sociology, ed. Martin, Isaac, Mehrotra, Ajay, and Prasad, Monica (Cambridge, 2009).Google Scholar

8. Pozen, “Tax Expenditures as Foreign Aid.”

9. Stead, Meredith, “Implementing Disaster Relief Through Tax Expenditures,” New York University Law Review 81 (2006): 2158–91.Google Scholar

10. Kelly, Erin L., “The Strange History of Employer-Sponsored Child Care: Interested Actors, Uncertainty, and the Transformation of Law in Organizational Fields,” American Journal of Sociology 109 (2003): 606–49CrossRefGoogle Scholar; Morgan, Kimberly J., “A Child of the Sixties: The Great Society, the New Right, and the Politics of Federal Child Care,” Journal of Policy History 13 (2001): 215–50.CrossRefGoogle Scholar

11. Novak, William, “The Myth of the ‘Weak’ American State,” American Historical Review 113 (2008): 752–72.CrossRefGoogle Scholar

12. Morone, James A., “American Ways of Welfare,” Perspectives on Politics 1 (2003): 137–46.CrossRefGoogle Scholar

13. Surrey, Stanley S., “Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures,” Harvard Law Review 83 (1970): 705–38, 717.CrossRefGoogle Scholar

14. Reagan, Ronald, Reagan’s Path to Victory: The Shaping of Ronald Reagan’s Vision, ed. Skinner, Kiron, Anderson, Annelise, and Anderson, Martin (New York, 2004).Google Scholar

15. Murphy and Nagel’s core argument is that “the modern economy in which we earn our salaries, own our homes, bank accounts, retirement savings, and personal possessions, and in which we can use our resources to consume or invest, would be impossible without the framework provided by government supported by taxes” (emphasis added, Murphy, Liam and Nagel, Thomas, The Myth of Ownership: Taxes and Justice [New York, 2002])CrossRefGoogle Scholar—in other words, that taxes are justified because they provide benefits to the society at large.

16. I am grateful to an anonymous reviewer for these points.

17. Stinchcombe, Arthur, “The Functional Theory of Social Insurance,” Politics & Society 14 (1985): 411–30.CrossRefGoogle Scholar

18. Esping-Andersen, Gøsta, The Three Worlds of Welfare Capitalism (Princeton, 1990)Google Scholar; Brady, David, Rich Democracies, Poor People (Oxford, 2009).CrossRefGoogle Scholar

19. It should be noted that the EITC applies only to those with an income; however, this is an administrative feature of this particular policy, not a feature inherent to refundable tax preferences.

20. Stead, “Implementing Disaster Relief Through Tax Expenditures,” 2165–66.

21. Marshall, T. H., Citizenship and Social Class (New York, 1950)Google Scholar; Titmuss, Richard M., Essays on the Welfare State (London, 1966).Google Scholar

22. Ewald, François, L’État-providence (Paris, 1986).Google Scholar An older intellectual lineage is suggested for this thought in Robert Frost’s 1947 “Masque of Mercy,” which hints at early twentieth-century unease over the collectivization of risk: “The thing that did what you consider mischief…. Was the discovery of fire insurance.” See Collected Poems (New York, 1969), 505–6.

23. Hacker, Jacob, “Privatizing Risk Without Privatizing the Welfare State,” American Political Science Review 98, no. 2 (2004): 243–60.CrossRefGoogle Scholar

24. Baldwin, Peter, The Politics of Social Solidarity (Cambridge, 1990).CrossRefGoogle Scholar

25. Scholars might also argue that collecting revenues and then distributing them creates state capacity—that is, it creates organizations that acquire expertise in certain kinds of activities, and it creates a set of people with interests that are not reducible to social interests. Those independent interests can have causal effects of their own, and that expertise can be redeployed in other ways. However, the same could be said of the bureaucracies that enforce taxation and tax preferences: reducing taxes in targeted ways requires policing to ensure that citizens are not overstepping the stated limits of the legislation, and these bureaucracies may have similar social effects as welfare bureaucracies.

26. Howard, “Making Taxes the Life of the Party,” 96.

27. Ventry, Dennis, “The Collision of Tax and Welfare Politics: The Political History of the Earned Income Tax Credit, 1969–99,” National Tax Journal 53 (2000): 983–1026CrossRefGoogle Scholar; Pamela Herd, “The Fourth Way: Big States, Big Business, and the Evolution of the Earned Income Tax Credit,” paper presented at the annual meeting of the American Sociological Association, Boston, 2008.

28. Martin, Isaac, The Permanent Tax Revolt (Berkeley and Los Angeles, 2008).Google Scholar

29. Conley, Dalton and Gifford, Brian, “Home Ownership, Social Insurance, and the Welfare State,” Sociological Forum 21 (1998): 55–82CrossRefGoogle Scholar; Conley, Dalton, Being Black, Living in the Red: Race, Wealth, and Social Policy in America (Berkeley and Los Angeles, 1999).Google Scholar

30. Of course, no welfare state completely avoids, or wishes to avoid, reinforcing market processes (see, e.g., Korpi, Walter and Palme, Joakim, “The Paradox of Redistribution and Strategies of Equality,” American Sociological Review 63 [1998]: 661–87).CrossRefGoogle Scholar But there are differences in degree that have important consequences for the level of poverty and inequality in a society.

31. Wilensky, Harold, Rich Democracies (Berkeley and Los Angeles, 2002)Google Scholar; Prasad, Monica, The Politics of Free Markets (Chicago, 2006).Google Scholar

32. Milton Friedman to William F. Buckley Jr., 26 April 1974, Box 22, folder 22.13 “Buckley, William F., Jr.,” Milton Friedman Papers, Hoover Institution, Stanford.

33. Baldwin, Peter, “Beyond Weak and Strong: Rethinking the State in Comparative Policy History,” Journal of Policy History 17 (2005): 12–33.CrossRefGoogle Scholar

34. Pimpare, Stephen, “Toward a New Welfare History,” Journal of Policy History 19 (2005): 234–52.CrossRefGoogle Scholar

35. Jens Alber, “What the European and American Welfare States Have in Common and Where They Differ: Facts and Fiction in Comparisons of the European Social Model and the United States,” Social Science Research Center Berlin (WZB) (order no. SP I 2009), 203.

36. Adema, Willem, Net Social Expenditure, 2nd ed., Labour Market and Social Policy, Occasional Papers No. 52 (Paris, 2001), OECD.CrossRefGoogle Scholar

37. Price V. Fishback, “Social Welfare Expenditures in the United States and the Nordic Countries: 1900–2003,” National Bureau of Economic Research, Working Paper 15982, http://www.nber.org/papers/w15982.

38. Fishback, Price V., “Who Spends More on Welfare: The United States or Sweden?” Freakonomics Blog, http://freakonomics.blogs.nytimes.com/2010/05/25/who-spends-more-on-social-welfare-the-united-states-or-sweden/.Google Scholar

39. Schulz, Nick, “The U.S. Is More Compassionate than Sweden?” The Enterprise Blog, http://blog.american.com/?p=14244Google Scholar; Wilkinson, Will, “America’s Nordic-Sized Welfare State,” Will Wilkinson, http://www.willwilkinson.net/flybottle/2010/05/25/americas-nordic-sized-welfare-state/.Google Scholar

40. Monica Prasad, The Politics of Free Markets; see also Monica Prasad, The Land of Too Much, forthcoming.