Costs and Benefits

by Ramesh Ponnuru

Sara Murray reports in the WSJ:

Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.

At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

Before being filled with despair, conservatives should keep in mind, first, that there are reasons to think that the 45 percent figure reflects temporary circumstances and, second, that it can’t possibly make sense to look at Social Security and Medicare when figuring out how many Americans get benefits but then ignore Social Security and Medicare when figuring out who pays taxes. If the entitlements count on the benefits side of the ledger, then payroll taxes should count on the tax side.

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