What portion of U.S. households receive more in federal, state, and local government benefits than they pay in federal taxes?
In 2016, 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 from about 40% in 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