"What Americans Think About Tax Breaks and How It Influences Public Policy & Inequality"

Monday, August 19th, 2019

Follow this link to watch Christopher Faricy's presentation on YouTube.

The July edition of the TR Site’s Speaker Nite Series was presented by Dr. Christopher Faricy, an Associate Professor of Political Science at the Maxwell School of Citizenship and Public Affairs at Syracuse University. His talk, “Me and the IRS: What Americans Think About Tax Breaks and How It Influences Public Policy & Inequality,” was based on research conducted for his upcoming book (The Other Side of the Coin: Public Attitudes towards Government Spending in America). Dr. Faricy broke his talk down into three sections: two focusing on key questions (Why are tax breaks popular? How do they influence public policy and inequality?); and, a third discussing public opinion and the 2020 election.

To understand why tax breaks are popular with the American people is to understand the “American Public Opinion Paradox”. The paradox is the disconnect between the liberal beliefs that American embrace and the moderate/ conservative political identity they associate with. Dr. Faricy stated that, “[Americans] are operationally liberal, but symbolically conservative.” We want the government to assist in addressing key issues such as education, poverty, childcare and retirement. But, we enjoy the symbolism or idea of a small government. Tax breaks are the middle ground between these liberal and conservative aspects. In essence, they can be seen as a “conservative tool for a liberal problem.”

Dr. Faricy pointed out that tax breaks are not the only method that can be used to address key social issues. Another method is direct spending, or providing funds directly to those in need of assistance. This is universally unpopular for several reasons. Chief among those reasons -- most Americans, regardless of identification, don't trust the government to distribute direct funds “properly”. This feeling of mistrust is not exclusive to the government, either. Americans equally distrust one another and see direct spending as a bad idea due to the concept of perceived “deservedness.”

Perceived deservedness is not uniquely American. This belief is universally found around the world, but these feelings are exacerbated here due to our multi-ethnic/racial society, polarized politics, and general political illiteracy. This perception is based entirely on the “feeling” that certain people are deserving of aid, while others are not. As a result of these biases and ideas of deservedness, tax breaks are used extensively rather than direct funding to address key social issues.

The Americans public's desire to see the government tackle key social issues using tax breaks rather than direct funding has led politicians to rely on this as a method of implementing public policy. Dr. Faricy says that tax breaks are one of the few methods that can withstand our partisan politics and allow policy to persist for decades after implementation. But, the over-reliance on tax breaks to solve social and economic hardship has led to greater inequality than it has alleviated.

The desired effect of these tax breaks is to provide financial aid to “deserving” individuals while excluding the “undeserving”. The result of this falls far short of the mark, exacerbating the ills of poverty and inequality that plague the nation. This inequality is facilitated in no small part by a tax system that favors the wealthy. Over fifty percent of all tax benefits go to the wealthiest twenty percent of the population and they get back ten times as much in taxes as the poorest Americans.

Tax breaks have failed to alleviate the suffering of the poor. In many ways they have made it worse. The likelihood of any change in the near future is slim. With the onset of the campaign season for the 2020 election, policy changes in this regard have been but on the back burner. Though some aspects of the tax policy will influence the election in various ways, the most powerful influencer will be the overall economic condition of the country leading up to the election. We are more than a year away from the election and the current economic status will become irrelevant. As Dr. Faricy suggests, only the last three months before the election will be relevant to the 2020 election. A strong economy is advantageous for an incumbent. What the economy will look like in the months leading up to the election is anyone's guess.

--Travis Ratka, Programming Assistant | Interpreter

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Speaker Nite is part of the TR Site’s regular Tuesday evening programming, which is made possible with generous support from M&T Bank, as well as the New York State Council on the Arts (NYSCA), with the support of Governor Andrew Cuomo and the New York State Legislature.

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