WORTHY or UNWORTHY?
(Is that really the question?)

 
 

by Linda M. Crannell

PHS Commentary  # 3

(aka  =The Poorhouse Lady)

7/16/2003

  

 

 "More than four million [of the] working poor who claim special tax credit will be required to provide Internal Revenue Service with [the] most exhaustive proof of eligibility ever demanded of any class of taxpayers."
quote from New York Times, April 25, 2003
link to abstract of archived full article  

 

      

 
 

If I ever again have to listen to a story by someone who knows someone who saw someone in a brand new Cadillac drive up to a grocery store and use their food stamps to buy booze and cigarettes, I think I'll  ... I'll  ... well ... I'm not sure what I will do. But it probably won't be pretty ... or even polite!

Of course there are welfare cheats! There are "cheats" in every institution that we have in our society.  But whenever anyone brings up this old hackneyed tale in a discussion about poverty, I want to respond with: 
"AAAAND ... your point is ?"  In other words, "So what!"

Some people cheat on their spouses.  Does that totally invalidate the whole institution of marriage?  Some parents abuse their children.  Does that totally negate the value of the institution of family?  Some pastors are predatory and some executives of charitable institutions are guilty of embezzlement.  Are those facts adequate reasons to justify abandoning the entire idea of a people trying to act together in faith or to benefit people who are in need of assistance?  So why should the existence of a few cheats receiving "welfare" drive the administration of relief for the very many who need it?

Why am I getting all riled up about this now?  Because this stereotype of the poor as merely conniving to get money without working for it is a very old and very nasty one.  It has a history which is an integral part of poorhouse history in America. It was deliberately contrived, it's very largely untrue, and it is alive and well (although it represents a sickness in our social psyche!) today.

Let's look at where it came from 
and how it was almost single-handedly 
responsible for the creation of poorhouses.

One cannot read the old 19th century poorhouse records without being startled (and somewhat appalled) by the extremely derogatory remarks made about the inmates under "causes of pauperism."  During that century the official causes of poverty were assumed to fall into one of several categories:  laziness, intemperance, hereditary defects, or "vicious" personal habits. Any survey of the statistical reports created by or for the agencies administering poor relief will show pre-printed lists of such "causes" -- without any reference to what were far and away the statistically overwhelmingly major real reasons people fell into poverty and were required to enter poorhouses. There were, in most such reporting forms, check lists of causes which did not even include any way to indicate "other" to point to additional problems contributing to poverty -- things like wars, financial depressions, crop failures, or the total lack of any social "safety net" (i.e. home fire insurance, health insurance, unemployment or workmen's injury compensation, or any retirement pensions). Instead, poverty was always blamed on the poor themselves.

Now, people have probably never liked paying taxes. Support of the poor through either taxes or charity may have always been done somewhat grudgingly by many. However, prior to the early 1800s poverty was generally viewed as one of those frustrating but apparently unavoidable realities of life.  It was not until shortly after the Industrial Revolution that the public image of the poor became almost demonized.  This portrayal of a large segment of the poor population as "unworthy" was pretty much the result of very effective "spin-doctoring" of the causes of the huge increase in the numbers of people added to relief rolls which began happening in the early 19th century.

We are bringing up this history because it is not over with!  It is still occurring -- and for the same reasons. I'm going to be rather blunt: the way many corporations in America do business produces poverty. Or at the very least it requires it. 

If you have a hard time believing that, consider the number of major American corporations which have recently downsized their operations in this country and moved most of their factories to countries with much more poverty...which allows them to pay miniscule wages. Or go see Academy Award-winning director Michael Moore's earlier documentary drama film, "Roger & Me." [Note: You may need to search a bit to find the movie which, despite its huge popularity,  is not carried at Blockbuster -- owned by Viacom Inc. which is a leading global media company, with preeminent positions in broadcast and cable television, radio, outdoor advertising, and online -- in other words, a mega corporation which won't carry a video which is critical of corporate conscience and conduct. Go figure!]

To deflect attention from the connection between poverty and this type of corporate money making, a scapegoat is needed. And we rather readily accept that scapegoat -- the unworthy poor --  for a couple of reasons. We tend to find only what we look for when we examine life. Our stinginess with regard to either charity or "voluntary" taxation which gives assistance to the poor may make us feel a little guilty.. For that reason we welcome information (true or not) which seems to get us off the hook ... like a stereotype which helps us rationalize that our greed or our lack of charity or compassion is justified.

Dr. Michael B. Katz [a university professor whose language tends to be a little less blunt and more academically acceptable, but whose enormous research work in the area of poverty has led me to my conclusions -- which I state a little more emotionally!]  in his 1989 book, "The Undeserving Poor" states the following: 

      "The redefinition of poverty as a moral condition accompanied the transition to capitalism and democracy in early nineteenth-century America.  It served to justify the mean-spirited treatment of the poor, which in turn checked expenses for poor relief and provided a powerful incentive to work.  In this way the moral definition of poverty helped ensure the supply of cheap labor in a market economy increasingly based on unbound wage labor. [Emphasis mine, PHL] 
     The moral redefinition of poverty followed also from the identification of market success with divine favor and personal worth.  Especially in America, where opportunity awaited anyone with energy and talent, poverty signaled personal failure.  The ubiquity of work and opportunity, of course were myths, even in the early Republic.  The transformation in economic relations, the growth of cities, immigration, the seasonality of labor, fluctuations in consumer demand, periodic depressions, low wages, restricted opportunities for women, industrial accidents, high mortality, and the absence of any social insurance: together these chiseled chronic poverty and dependence into American social life.
     Persistent and increasing misery did not soften the moral definition of poverty.  Neither did the evidence available through early surveys or the records of institutions and administrative agencies, which showed poverty and dependence as complex products of social and economic circumstances usually beyond individual control."

p. 14

 OK, with that historical context in mind ... let's look at some of the most troublesome aspects of the new regulations regarding eligibility for the Earned Income Credit.  Remember what the EIC is supposed to be -- a way to reward the efforts of the poor who work at paid jobs.  It was intended to provide motivation to those poor whom it was assumed would otherwise merely choose to collect "welfare" and not work at all if taxation of the income they earned through work brought their take-home pay down to the same level it would have been if they merely collected untaxed relief payments. 

At first glance that basic assumption itself would seem to reflect belief in a stereotypical negative character trait among the poor ... the idea that they are lazy and will not work unless some social program provides motivation for them to do so.  [Another book by Michael Katz has a title which may be considered rather satirical ... "Improving Poor People" (1995). It examines the persistence of this assumption that the solution to the persistent problem of poverty lies in somehow improving the character, habits etc. of the poor... rather than improving the economic conditions of our society.]

However, although those in higher income categories pay more dollars in taxes, let's look at this more carefully. Those who are not poor need to devote only a portion of their "after tax" income to meet the basic necessities of life -- food, clothing, shelter, health care, etc. After all of that is taken care of, there is still  "discretionary" income left to them. Once the working poor have paid taxes, almost all of what is left is needed for survival. They often have no "discretionary" income.  

Even the rich don't generally work harder merely to accumulate more money after taxes ... they are motivated to continue to work (more than is required for simple survival) to improve their quality of life.   The EIC allows the lower income family the same kind of motivation.  As a result, the working poor may have a little more money left to help educate their children, to help them live with more privacy and safety, to have more time for family members to enjoy each other's company, to have the freedom to pursue more satisfying and safer jobs, etc. 

The Earned Income Credit (which merely reduces the amount of payroll tax required of the working poor) is no more a welfare give-away than are any of the tax breaks enjoyed by higher-earning people who are more skilled in the art of the "tax exemption" or the "corporate welfare" enjoyed by large companies who evade huge tax bills by artfully (but legally ... not necessarily morally or ethically) choosing where to claim the location of their headquarters to avoid paying taxes.

 

Yet we officially tolerate these tax breaks for the more wealthy with almost no requirement that these individuals or corporations document the legitimacy of their claims!


There is a double standard inherent in this policy.

 

     "If the Internal Revenue Service (IRS) gets its way, within a few years many low-income families will have to provide exhaustive documentation before they can claim the Earned Income Credit (EIC). The IRS claims this "pre-certification" plan will reduce tax return errors. However, the requirements are so onerous that many eligible families may not claim the credit. Worse, the plan unfairly targets low-income families while ignoring the fact that other parts of the tax code are more often the sources of error.
     Imagine if one-third of all taxpayers were required to "pre-certify" their mortgage interest deduction, their medical expenses or their IRA contributions. Politically such a proposal would never fly; the outrage would be tremendous. So should it be with this proposal aimed at the working poor. Unfortunately, the working poor are an easy political target, and they are the ones who will be receiving this not-very-special treatment.   ...       
     Why the special focus on poor families? Politics. In 1992 the IRS released a report demonstrating that the greatest sources of error were from people running their own businesses who failed to report all of their income, according to a recent story in The New York Times. The revenue lost to these errors was six times greater than that lost to tax credits of all types. 
     The political outcry in reaction to this report was tremendous, but little has been done to amend this. Instead of focusing efforts on the tax code more broadly, the IRS honed in on poor families claiming the EIC."
 

Auditing the Poor              May 27, 2003                                TomPaine.com  

... And the policy addresses a Misplaced Priority

In an article in Mother Jones titled "Sheltering Tax Shelters : The Bush administration is pulling out of a campaign to crack down on international tax evaders" by  Amos Kenigsber,  June 4, 2001 we learn: "American citizens alone are estimated to have at least $500 billion secretly cached overseas, costing the US government hundreds of millions in unpaid taxes -- and those numbers are widely thought to be growing."

                                               ... And the policy is not cost effective 
     because of the huge amount of additional resources needed by IRS to conduct such an extensive audit.

But, more discouraging than anything else about this policy is the fact that it perpetuates the myth that dealing with poverty depends primarily on weeding out the claims of the UNWORTHY POOR.  As a wealthy and powerful society, we should have outgrown this notion a long time ago.  Only when we let go of this scapegoat will we be free to examine and successfully address the factors that keep so many of our workers in poverty.  We should no longer allow ourselves to be diverted from this task.

 

 

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