A Dearth of Excitement for Post-Tax Policies

Catherine Rampell at WaPo:

"well-intended, feel-good policies can sometimes backfire, hurting the people you're trying to help. … 

"Post-tax" policies, by contrast, involve redistribution of income and wealth through the tax code and social safety net. Think: the earned-income tax credit (EITC), food stamps, housing vouchers, health insurance subsidies. They are about boosting living standards on the back-end, with the taxpayers paying.

"Relative to other rich countries, the United States relies very little on these post-tax tools. If you look at America's income inequality before taxes and transfers, it's not great — but it's still about on par with France, Germany and Finland. If you look at income distribution after taking into account tax and transfer payments, we suddenly become the second-most-unequal developed economy in the world, behind Mexico. In other words, high inequality in the United States says more about our taxing and spending choices than our paychecks. …

"the dearth of excitement for these post-tax policies is a strategic mistake."

Of course, the Democrats' platform has included all of those things for a long time - increase in the EITC, CTC, etc. And it didn’t resonate with people, despite all the evidence. Most people don't pay too much attention to politics, and these are pretty technocratic proposals. Maybe we can get voters excited by telling them they should be excited, but a better strategy might be to meet people where they actually are. The first priority should be figuring out how to win elections. In that regard, Democrats' reluctance to have a more ambitious agenda - where they propose more than targeted policies that could pass Congress - seems like the strategic mistake.
Of course, the challenge with an ambitious agenda that's focused on eliminating poverty is that Americans have traditionally been suspicious that those in need are responsible for their own poverty, and hence not deserving of aid. Maybe that’s changing, but I’d like to see evidence of shifting attitudes first. Which brings us back to square 1, where no one knows what to do. Maybe a battle cry for eliminating child poverty, like Tony Blair in 1999, is the right approach; at least the moral deservingness problem seems less salient here.