Social Darwinism

Robert Reich had an opinion column after the Paul Ryan pick for VP in which he said, "Ryan exemplifies the social Darwinism at the core of today’s Republican Party: Reward the rich, penalize the poor, let everyone else fend for themselves."

I've gone on to read the "social Darwinism" label in a half dozen other editorials, but it was Reich's definition that really got me thinking about government and it's relationship with the poor, the rich, and everyone else.

First of all, I think in terms of where money is actually spent, the vast, vast bulk of our spending goes to the "everyone else" category. Social security and medicare go to elderly people regardless of income. Combined, they make up about 44% of our budget. The next biggest slice of the pie is defense, at almost 25% of the budget, but this again seems to be an "everyone else" program. In theory, we all share equally in the benefits (and liabilities).

Welfare, which we would think of mostly as money going to the poor, is about 12% of the budget.

The rewards to the rich are much more difficult to quantify. A lot of their income is taxed different and at a much lower rate than ordinary income. They obviously also benefit the most from a low inheritance tax rate. Mortgage rate deductions also benefit the wealthy more than the poor or even the middle class. If you have a million dollar mortgage, you get a much bigger tax break than if you live in a double-wide. The wealthy also don't pay as much in social security taxes, since there's a wage cap on how much income is taxed. But the most expensive tax break I could find was the one for employer provided health insurance. It's true that corporations get the bulk of this tax break, but I would say that most people with employer provided health insurance probably fall into the middle class. The wealthy also sometimes avoid taxes via tax shelters, storing their money offshore. The Planet Money podcast recently did an article about this, and it's apparently fairly easy to do. But, since the top 1% of tax payers pay 37% of all income taxes, they obviously aren't hiding all their money overseas. Still, I'm willing to say that that the reason our tax code is so convoluted and confusing is because wealthy special interests spend a lot of money to tinker with it to give them advantages. My gut guess is that all the tax breaks probably add up to a much greater sum than all the money spent on welfare, but who knows?

I will say that, in classical government budget theory, you tax stuff you want less of and spend money on stuff you want more of. So, the government has a high tax on cigarettes, for instance, to drive up the cost and discourage smoking. While it's a tiny percentage of government spending, we want solar and wind power, so we spend money on these industries and give them tax advantages.

So, why do these theories not apply to wealth and poverty? If Reich is unhappy that Republicans would reward the rich and punish the poor, is he advocating that the government reward the poor and punish the rich? If we subsidise poverty by increasing spending, don't we actually increase poverty? If we punish the rich with higher tax rates, don't we just encourage them to report less and less income?

Keep in mind that I'm not a Republican. I already know that, this fall, I'll be voting for Gary Johnson on the libertarian ticket. The Ryan budget that Reich finds so draconian doesn't actually eliminate deficit spending until 2040! Nor have Romney or Ryan made any specific proposals of how they would simplify the tax code to eliminate all the loopholes, most of which represent governmental tinkering with free markets by favoring one industry over another. (For instance, the health insurance tax break favors employees of corporations over self-employed people. Or, subsidies that encourage the growth of corn over other crops.)

One final note: If you don't believe in social Darwinism, do you believe in social Intelligent Design?