New study to reduce inequality suggests Americans prefer tax breaks over welfare programs
March 21, 2019
For the past year and a half, Associate Professor of Political Science Chris Ellis has been working on a study that determines the best way to reduce inequality. Inequality policies face many challenges as Ellis explained, “When we try to reduce inequality by spending money on the poor or doing job training, we run into an issue: people don’t like the government or trust the government to get things right.”
Ellis explained how in the United States, there are two basic ways for the government to help reduce inequality: They can send checks or they can change the tax code. Examples of sending checks include welfare, cash payments, and food stamps, whereas changing the tax code allows people to get credit on their taxes for doing certain things such as having health insurance or buying a house.
Ellis and his research partner, Professor Chris Faricy from Syracuse University, surveyed a nationally representative sample to look at the perceptions surrounding these different ways of reducing inequality. Ellis and Faricy constructed a made-up social program, saying it would cost X amount of dollars and would include various benefits to recipients for doing certain things.
To half of the respondents, the social program was portrayed as the government sending people checks, and to the other half of the respondents–the same beneficiaries, same amount of money, same everything–the program was portrayed as the government giving tax credits. With these two groups, Ellis and Faricy could determine whether checks or tax credits are a more beneficial means of reducing inequality.
In terms of the results, Ellis said, “When they were giving tax credits, not only were the programs more popular, but the people that got them were more popular. People liked the recipients more, even though it was the same thing.”
To better understand the reasoning behind the results, Ellis explained that tax credits prevailed because most of us think of taxpayers as good people; they are playing by the rules, and therefore, they are deserving of the credit. This strategy also allows for money to be distributed in a way that is politically easier. “It fits both parties priorities: Democrats want to help the poor and Republicans want to cut people’s taxes. This is the difference between economics and political science. The standard way of thinking economically is that if the person doesn’t have enough money, send more. But if that doesn’t work politically, then you have to get creative,” Ellis said.
Furthermore, Ellis expressed that people are skeptical about others who simply get checks from the government. It can be difficult to expand these programs because objections are raised very quickly. “Either the government is going to screw it up or the people don’t deserve the money anyway,” Ellis said.
Ellis said that this study helps prove something political scientists have suspected for years: the way policies are framed affects the way citizens respond. Ellis further said, “It sounds a little weird, right? Let’s take the same amount of money and then spend it differently and now, all of sudden, people like it.”
If the way in which Americans view social programs and government aid is taken into consideration, the results make sense. “But it’s a little counterintuitive to do the exact same thing just a little differently. That’s weird. However, if you care about helping the less fortunate, then you have to meet voters where they are, and where they are is ‘We don’t like or trust government,’ so we need to get creative with other ways to do it,” Ellis said.
This study was partly funded by the University’s Institute for Public Policy and benefited from the assistance of research intern Nikki Marrone ’20.