What portion of U.S. households receive more in federal, state, and local government benefits than they pay in federal taxes?
In 2013, roughly 60% of U.S. households received more in federal, state, and local government benefits than they paid in federal taxes. This figure has increased by about 20 percentage points since 1979. Government benefits can suppress market income by (1) providing the means and incentive not to work, (2) reducing the incentive to work by cutting take-home pay (if taxes are raised to pay for the benefits), and (3) depressing wages by decreasing productivity-enhancing investments (if governments borrow the money to pay for the benefits).
DocumentationIncome Sources & Federal Taxes