Politics of Hidden Welfare
Attention has recently been brought to the "hidden welfare state" because Howard and others believe it negatively impacts numerous aspects of society. In terms of social programs, the US's social welfare state is smaller than many European countries. The United States has yet to institute some of the most common European social welfare programs, such as universal health care. However, if the hidden welfare state of tax expenditures with social objectives is taken into account, the American welfare state is actually much larger.
Knowledge about the hidden welfare state is also important because it shows that a larger portion of the U.S. population benefits from welfare than it is usually believed. Many of the social welfare programs are targeted to help lower-income families, who have throughout history been racial minorities, such as African Americans. Socio-economic and racial issues such as those have both caused controversy and a stigma to be attached to social assistance programs. In contrast to the reasons for that stigma, wealthy and poor beneficiaries of many of the aforementioned tax expenditure programs are net-contributors to IRS receipts, unlike many of those who receive "visible" welfare, i.e. the portion who are receiving it due to long-term unemployment. Nonetheless, many affluent whites benefit from the welfare state, too, through tax expenditures related to retirement saving, charitable contributions (although these often help those in need of "visible" welfare, not only the philanthropist), higher education, and home ownership.
The argument on the other side would be that those receiving "hidden welfare" have an amount that is supposed to be paid in taxes but is credited back whereas those receiving visible welfare do not have an amount that is supposed to be paid in taxes and receive additional welfare. One produces a theoretical loss (those getting the tax deductions) and the other an actual loss (those receiving welfare without paying in more than 100% of benefits).
Read more about this topic: Hidden Welfare State
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