“Free stuff:” the hypocrisy of a growing campaign theme

November 2nd, 2015 at 10:50 am

[So, we were hanging around the water cooler the other day reflecting on this “free stuff” meme. That conversation led to this guest post written by Ben Spielberg, Cecile Murray, and Bryann DaSilva. Add up their ages and you’d probably get pretty close to mine–in other words, these millennials give me hope! –JB]

At last week’s Republican presidential debate, New Jersey Governor Chris Christie characterized the first Democratic debate as “a parade of, ‘I’ll give you this for free; I’ll give you that for free.’” Senator Marco Rubio made a similar comment a few weeks ago:

“It was basically a…debate about who was going to give away the most free stuff: Free college education, free college education for people illegally in this country, free health care, free everything.”  Such remarks also mirror Jeb Bush’s argument that black voters will back him because his “message is one of hope and aspiration,” not “one of division and get in line and we’ll take care of you with free stuff.”

There are at least three definitions of “free stuff.” The broadest would simply include all government benefits. A narrower version might apply only when people receive more in benefits than they pay in taxes. A third might refer to any net gain relative to the status quo.  Under any of these definitions, the claims made by Christie, Rubio, and Bush are both biased and misleading: they attack help for people who need it while implicitly condoning favors for the wealthy.

Consider the first definition of “free stuff,” preferred by Bryce Covert and Emily Badger, which refers simply to “government benefits.”  The Republican candidates have alluded to a subset of these: public education, Medicaid, and direct cash assistance to the poor, to name a few.  But the government issues numerous other benefits as well, benefits that the politicians complaining about “free stuff” seem perfectly happy to keep intact.

For example, Rubio and Bush would cut the tax rate on capital gains below its current level (Rubio would completely abolish it); this reduced rate already provides a significant benefit to people who invest in assets (i.e., the wealthy). Politicians also regularly rail against critical housing assistance for the most vulnerable while defending or expanding expensive, regressive, and unnecessary housing tax breaks, about 70 percent of which go to those in the top 20 percent.  How can it be that government benefits for poor people are “free stuff” while benefits for the wealthy are not?

We suspect Christie, Rubio, and Bush would be more partial to the second definition described above: it’s “free stuff” if you receive more in benefits than you pay in taxes but not if you pay more in taxes than you receive in benefits.

Yet this approach is also flawed. It counts all of the costs of taxation but ignores the benefits of the public goods those taxes fund – things like roads, national defense, functioning financial markets, and technology that relies on prior and ongoing government research.  It also ignores both the short-term and long-term economic benefits produced by government programs, such as those that invest in children and promote a healthy and educated workforce.

While it is impossible to quantify the precise value of all of these public goods and investments, many create significantly more lasting, long-term value than what it costs taxpayers to fund them (just consider railroads, highways, and medical research, for example).  These benefits arguably produce even greater value for the rich – who rely on them to do business and hold on to their fortunes – than for the middle class and poor.  We suspect most people are actually net recipients of government benefits, and hence recipients of “free stuff” by this second definition.

The third way to think about “free stuff” – relative to current policy – probably mirrors our psychological conception of “free” most closely.  Suppose, for example, that you opened your email today to find an unexpected $100 Amazon gift card.  No matter how much money you had spent or planned to spend at Amazon, you would call this “free” money.  Or imagine that you go out to dinner at a restaurant and a waiter decides to “comp” your dessert.  Regardless of the overall price of your meal, you would likely consider that dessert item to be “free.”

In this framework, “free stuff” from the government would be new benefits or reduced taxes relative to one’s current situation.  Since the Christie, Rubio, and Bush tax plans all contain massive tax cuts, they’re giving away massive amounts of “free stuff,” and the vast majority of that “free stuff” – unlike the “free stuff” proposed by the Democratic candidates – is going to the very wealthy.

Which of the above definitions you find most compelling ultimately depends on your values.  Politicians using the phrase “free stuff” should make it clear just what they mean.  They should also acknowledge the extent to which, under any of these frameworks, they themselves want government to provide “free stuff” – and generally in a way that benefits the rich substantially more than those who actually need the help.

We should also remember, as Christie himself alluded to in last week’s debate, that nothing is actually “free.”  Government is merely a tool for determining our national priorities and deciding how we’re going to raise the money to implement them.

In our view, we should use that tool to reduce inequality, boost opportunity, and provide public goods that the private sector can’t or won’t provide on its own.  We should raise enough money to fund these endeavors, and we should raise it in an equitable way, recognizing people’s varied ability to pay.  This philosophy has nothing to do with giving away “free stuff;” it’s actually about trying to stop imbalances in “free stuff” received in the birth lottery from undermining the American dream.

We recognize that some will view the purpose of government differently.  But no matter your values or how you define the term, don’t bash “free stuff” for average Americans while ignoring the “free stuff” for the top 1 percent.

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9 comments in reply to "“Free stuff:” the hypocrisy of a growing campaign theme"

  1. Tom in MN says:

    I would include stability as a key reason the rich should not begrudge the support given to those that are less fortunate in our society. The rich have the most to loose should the vast majority decide they have had suffered enough and it’s time for an “off with their heads” moment like those that ended the extreme inequality of many kingdoms.

  2. Smith says:

    I think it is a mistake to try to justify higher taxes on the rich by saying they benefit the most from a well functioning economy, stable, productive and well behaved citizenry.
    The country is doing ok with the current high level of inequality, and if one bought into the notion that the inequality is necessary to propel the country forward, the rising tide and trickle down benefits everyone, and perhaps lower income groups more than the rich. If we looked at the US standard of living 100 years from now and it surpassed that of Denmark many times over, who is to say the rich benefitted the most even with the current level of inequality.

    Stay away from justifying taxes according to who benefits. Stick to more provable and obvious arguments, higher taxes on the rich correlated with better outcomes previously, that’s where the money is, and mostly (to repeat) the rich don’t need the extra money taken away. How much food can you eat, clothes can you wear, cars you can drive, houses can you live in, space cab you occupy, travel can you take? Extra money just creates bidding wars for penthouse apartments that the 2% can no longer afford.

    Even so, it’s not a win win proposition, taking away millions of dollars means the ultra rich are no longer gods.

  3. Robert Salzberg says:

    Medicare, Medicaid, Social Security, and unemployment have dedicated tax revenue streams. If we back out those benefits, ‘entitlements’ are a small fraction of the $1.2 trillion in yearly tax entitlements that flow overwhelmingly to top income earners.

    While I liked the article, one piece sticks in my pet peeve craw:

    “We should raise enough money to fund these endeavors, and we should raise it in an equitable way, recognizing people’s varied ability to pay.”

    This is just a fancy way of saying that taxes should be progressive. Even die hard flat taxers would agree since if you make more you pay more with a flat tax, even if it is the same percentage.

    The deeper reason is that, in general, the more you make, the more you rely on government subsidies, infrastructure, and other workers to make that money. Show me a very rich person and I’ll show you a bunch of poorer people that are directly and indirectly supporting their riches. That’s the real reason for a progressive tax system.

  4. George H. Blackford says:

    Republicans have been very successful at convincing people that we can cut taxes without affecting government services and then using the resulting deficits as an excuse to cut funding for government programs that serve ordinary people. The simple fact is that if we want good government we have to pay for it, and the way we pay for it is by raising taxes not cutting them. Democrats would be much more effective in winning elections if they tried to make this point rather than simply ignoring it in the face of the nonsense put forth by the Republicans. See: http://www.rweconomics.com/Deficit.htm

  5. Pinkybum says:

    There is no doubt that the Republican definition of “free stuff” means any benefit received for which you did not work for. In this regard Social Security and Medicare are deemed to be OK (even though they are attacked as being wasteful because you know government is always the problem!) Welfare benefits are NOT OK because they are not paid for by the people receiving them. Working people generally see this as being unfair – why should someone get unearned money when they work very hard for the meager wages they earn.

    No matter how reasonable it is to provide a minimal safety net in our society because let’s face it we don’t want to see millions of people dying on the street, this fundamental issue of fairness will always be a political winner. To change minds this case HAS to be made in a clear and compelling way over and over again. It doesn’t matter that politically this case was made decades ago politics always needs advocates for the disadvantaged.

  6. purple says:

    When you have to respond to the “free stuff” jibe with a densely worded article you have already lost with 99% of the public.

  7. Bob says:

    Great piece. I am interested to know if there is any research that attempts to identify if there is increased efficiency in paying taxes to a small number of entities for services provided by government rather than through contracts and/or individual transactions with literally hundreds of private actors.

  8. Paul says:

    Christie is just ticked off that all the taxes in NJ aren’t funneled into an account for him to use for the benefit of himself and his cronies. This is a guy, after all, who runs up hundreds of thousands of dollar tabs for food.

  9. David Condon says:

    Tax cuts are not government benefits or entitlements to be more precise. Yes, that is the definition they would favor, and under that definition their statement is correct. They don’t consider taxing less money to be morally the same as giving people entitlements using taxpayer money. I would agree with that sentiment.