Penalizing the Poor
For the poorest families, federal policy actually penalizes efforts to save money by cutting off benefits to those who manage to create even the smallest financial cushion.
Economic mobility in the United States means the working poor are expected to bootstrap their way into the middle class, as middle-class families climb to greater wealth. But for the first time, we face a scenario where that may not happen. Income is not enough as assets, too, are needed to progress in the American economy. While the federal government pours out millions to help with asset building, this report shows how using the tax code for subsidies is hurting the lower income and middle class while helping the wealthy get wealthier with no oversight easily available.
For the poorest families, federal policy actually penalizes efforts to save money by cutting off benefits to those who manage to create even the smallest financial cushion.
In fiscal year 2009 alone, the federal government spent nearly $400 billion on policies that help families buy homes, start businesses, put their children through college, and retire comfortably.
Over half of the $400 billion in federal asset-building benefits went to the top 5% of taxpayers, those earning more than $167,000.
Taxpayers bringing in more than $1 million enjoy $95,820 in annual support while those making $50,000 receive less than $500.
The data in this study are compiled from the FY 2009 federal budget. Data on direct outlays come from line items in departmental budget appropriation documents. Data on tax expenditures come from the U.S. Congressional Joint Committee on Taxation. All figures cited in the study are in nominal dollars.
We must reform the existing approach to wealth building, which amounts to an ad hoc, uncoordinated and misaligned set of strategies that are costing our nation dearly.
