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Archive for May 5th, 2008

an “iPod government” vs. the EITC

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From the New York Times this weekend:

On many budget matters, Mrs. Clinton’s instincts seem similar to her husband’s. Both favor carefully crafted tax credits that can help people who most need it, that come with relatively modest price tags and that seem likely to survive a divided Congress.

Mr. Obama sometimes talks of his vision of an “iPod government,” with simple programs that people can understand. He also talks of persuading voters and members of Congress, including Republicans, to support his plans.

Ah, whether through coyly rendered insight or dumb luck, the reporter here is on to something in the arrangement of these two paragraphs. The policy opposite of an “iPod government,” in the best possible case of what that might mean is in fact the system (a mainstay of neo-liberal regimes of the last decade or so) of shifting from direct social disbursements to the tax credit form of funds delivery. Google around for “unrecovered tax credits” and you’ll see why this might be the case.

You might start with the wikipedia article on the Earned Income Tax Credit, which includes the following paragraphs:

Millions of American families who are eligible for the EITC do not receive it, leaving billions of additional tax credit dollars unclaimed. Research by the Government Accountability Office (GAO) and Internal Revenue Service indicates that between 15% and 25% of households who are entitled to the EITC do not claim their credit, or between 3.5 million and 7 million households.

The average EITC amount received per family in 2002 was $1,766. Using this figure and a 15% unclaimed rate would mean that low-wage workers and their families lost out on more than $6.5 billion, or more than $12 billion if the unclaimed rate is 25%.

To translate this into UKese, look here. And here’s a graphical representation (what else?) of just why the EITC is a symptom of a politics of neo-liberal complexity, rather than true socialist simplicity:

Easy enough to figure out what’s coming to you, eh? Try it yourself to see. This is the “survival of the fittest” version of the welfare state, designed to fail. Born of actuarial anticipation rather than humane and good faith efforts to help. Perhaps most important of all, even if it does work, it’s designed in such a way that almost no one can understand how it works, or even what it is in the first place. But this too is the point, for if the citizenry was to move about with a sense that they in any sense are thought to be entitled to a living, well…. we simply can’t have that, those are waters that we don’t dare to sail into, etc etc…

Sadly, I’ve not really seen any signs that Obama actually means to take the project of (best case) iPod governmentality up. I suppose there’s more to say – about the difference between best and worst case simplicity, what lies between those poles, and what in the end I think all this might mean… As always more to come…

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May 5, 2008 at 1:16 am