The hidden welfare state is a term coined by Christopher Howard, professor of government at the College of William and Mary, to refer to tax expenditures with social welfare objectives that are often not included in discussions about the U.S. welfare state. Howard's terminology implies that "visible" social welfare programs are designed to help the neediest, but the "hidden" programs often offer benefits to wealthier individuals and companies.
- Programs that constitute the visible welfare state of direct expenditures include: Social Security, Medicare, and Aid to Families with Dependent Children (AFDC, now Temporary Assistance to Needy Families).
- The hidden welfare state refers to tax expenditures (deductions) with social welfare objectives: tax deductions for retirement saving, charitable contributions, higher education, and the home mortgage interest deduction. All of these deductions benefit constituencies with considerable disposable income.
Tax expenditures and direct expenditures essentially have the same effect on the federal budget. Direct expenditures represent the amount of money the government is paying out, whereas, tax expenditures represent the amount of money not collected by the government.
To better understand the concept of social welfare tax expenditures and how they are similar to direct expenditures, Edward Berkowitz gives the example of, “if a person owes $100 in taxes to the government and the government forgives the obligation on the condition that the person buy a health insurance policy, then the situation is the same as if the government itself spent the $100.” Each expenditure also targets a specific portion of the population in an effort to give the selected population some type of relief.
Read more about Hidden Welfare State: Structure of The Hidden Welfare State, Origins, Politics of Hidden Welfare
Famous quotes containing the words hidden, welfare and/or state:
“Opinions are to the vast apparatus of social existence what oil is to machines: one does not go up to a turbine and pour machine oil over it; one applies a little to hidden spindles and joints that one has to know.”
—Walter Benjamin (1892–1940)
“Whether in the field of health, education or welfare, I have put my emphasis on preventive rather than curative programs and tried to influence our elaborate, costly and ill- co-ordinated welfare organizations in that direction. Unfortunately the momentum of social work is still directed toward compensating the victims of our society for its injustices rather than eliminating those injustices.”
—Agnes E. Meyer (1887–1970)
“I am willing to pledge myself that if the time should ever come that the voluntary agencies of the country together with the local and state governments are unable to find resources with which to prevent hunger and suffering ... I will ask the aid of every resource of the Federal Government.... I have the faith in the American people that such a day will not come.”
—Herbert Hoover (1874–1964)