The Other Side of Social Spending: Public Opinion toward Social Tax Expenditure Policy in the United States

A substantial body of scholarship on individual’s attitudes towards public spending on social welfare benefits in the U.S. has focused on trying to understand the factors of and changes in level of support for that spending, the role of race and class-based attitudes in those views, and the types of programs individuals understand to be part of social spending. This research has typically focused on opinions about direct public spending programs, such as Social Security, Medicare, and AFDC. This focus however, largely ignores social programs supported by “indirect spending,” specifically, the provision of social benefits through the tax code, such as tax expenditures for the home mortgage interest deduction and the tax-privileged status of employer-provided health benefits. Direct social spending is largely progressive in its redistributive effects; in contrast, tax expenditures tend to redistribute income regressively and are largely hidden from public view. According to the OECD, the U. S. has the largest amount of indirect social spending through the tax code in the world, at nearly 10% of GDP.

This raises questions such as whether and how public attitudes about social spending vary by expenditure types, or the extent to which Americans recognize such programs as a form of social welfare spending. Professors Christopher Ellis of Bucknell University and Christopher Faricy of Syracuse University propose to examine public attitudes toward social spending, with a specific focus on public opinion toward tax expenditures which subsidize the private provision of social benefits. Their project will focus on three key questions. First, they will examine why citizens, all else being equal, tend to express more support for social welfare programs subsidized through the tax code than those which are directly administered. Second, they will explore the connection between views about tax expenditures and attitudes toward income inequality, attempting to resolve the seeming disconnect between a public that is concerned about growing inequality and one which strongly supports regressive tax expenditures. Lastly, they will examine how attitudes toward tax expenditure policy intersect with racial, class, and other stereotypes known to affect opinion toward direct social spending.