It’s wrong to receive public welfare benefits to which one is not entitled. The legal consequences of taking such benefits from the society’s safety-net provisions are quite severe. The crime is fraud, a felony charge.
The home page of the Ulster County executive does not normally feature criminal arrests. A glaring exception is arrests for welfare fraud, which have been posted regularly for many years. Public assistance is intended to help those in our community who are most in need, explains the website. Law-enforcement officials are committed to protecting the benefits for those who truly require them, and Ulster County does that by actively enforcing a zero-tolerance anti-fraud program.
Why would this form of crime receive so much more governmental recognition than even more serious transgressions of other kinds? I have no answer for this, other than having to share the uncomfortable conclusion that many others have drawn: In the American criminal justice system, wealth — not culpability — shapes outcomes. Indigent people are unfairly disadvantaged at every step in the system. The already advantaged are treated far more leniently than the disadvantaged.
That’s unjust. Growing economic inequality is having an increasingly corrosive influence on American society.
Is it therefore time for another approach, higher taxes on the wealthy in the United States? Most people would favor more progressive taxation only if it doesn’t have a detrimental effect on economic growth. Would a hike in the taxes of those at the top of the income pyramid have that effect?
The recently released annual IRS treasure trove of statistics on New York State income-tax filings by local area (county and zip code) showed that the 14,880 Ulster County filers with incomes over $100,000 in 2016 earned more than half the total adjusted gross income (AGI), or net income before taxes reported by everyone living in the county in 2016. All Ulster County filers had total adjusted gross incomes of $5.22 billion, and those almost 15,000 filers with AGIs of $100,000 or over had gross incomes of $2.74 billion.
That left the remaining 71,660 filers, four-fifths of the total number, with $2.48 billion, less than half the county’s total reported income. The top fifth of the universe of Ulster County filers had more income than the remaining four-fifths.
Is that equitable?
Like folks elsewhere, most Ulster County residents would have a ready answer — probably based on their political beliefs. But this is not a question that should be answered too quickly. Does the surge in the past four decades or so of top incomes align with a similar increase in economic activity? Do incomes reflect the value of what people produce or otherwise contribute to the economic system? If so, the inequality in society might be perceived as more defensible.
Some people are too ready, it seems to me, to pull out a longtime bugaboo like the word “socialism” to describe policies remediating inequality. Raising taxes on the rich in a capitalist society is not socialism.
Safety-net measures extended mostly to those at the lowest rungs of the economic order are an important contributor to decreasing social inequality (“the poorest hee hath as much right as the richest hee,” as was said in the Putney Debates in England in 1647). But the progressive tax system, the amount taken out of income by government in the form of taxes, is easily the largest social influence on income redistribution.
For additional perspective, let’s compare the Ulster County statistics to the statewide ones. According to the same IRS data base, 1.8 million filers statewide with incomes $100,000 or over earned roughly $520 billion in aggregate. The 7.8 million filers with adjusted gross incomes below $100,000 earned a total of $250 billion.
According to these statistics, Ulster County is less income-unequal than the state average — more equal than the New York City suburbs but less equal than the impoverished areas of upstate.
On February 28, four felony arrests were announced in Ulster County in the latest public shaming after arraignment of accused abusers of the county safety net. The alleged perpetrators were accused of stealing $9409 in all.
Jasmine Veillette of Olivebridge was accused of failing to disclose cash resources she had from August 2018 through December 2018. This resulted in Veillette receiving $2058 in temporary assistance benefits to which she was not entitled.
Michael-Ann Goodrich of Round Top in Greene County was arrested by the Ulster County sheriff’s department for failing to report her income from February 2018 through January 2019. Claiming to live in Ulster County, she received $1648 in Supplemental Nutrition Assistance Program (SNAP) benefits to which she was not entitled.
Franc Libihoul of West Hurley filed several applications for Home Energy Assistance Program (HEAP) benefits and failed to report his income between 2015 and 2018. Libihoul was charged with receiving $3075 in HEAP benefits to which he was not entitled.
Lisbeth Quiles of Beacon failed to report income while residing in Ulster County from August 2018 through February 2019 and received $2628 in SNAP benefits to which she was not entitled.
Because a lot of people don’t have any wealth at all, wealth inequality is always much higher than income inequality. Wages and salaries provide about three-quarters of total income, capital income the rest. It’s the top tenth that has easily the lion’s share of capital income (interest, dividends, pensions, tax refunds, etc.).
Advanced economies tax incomes at from 30 percent to 50 percent, with the United States and Japan at the lower level and the European welfare states at about 50 percent. That’s a lot of income redistribution, concedes economist Emmanuel Saez of Berkeley, who favors it. He thinks that means societies care about income distribution. “We find it fair to have the community do substantial amounts of distribution through its government,” he writes. Taxation is used to ameliorate the inequality which has been increasing every year.
In his analysis, Saez particularly targets the richest one percent in various advanced societies. He concludes that the economies in countries with more progressive taxation like Sweden and France haven’t grown at a slower rate than those with less progressive taxation. They might or might not In the future, of course.
From the New Deal in the early 1930s through the 1970s, when tax rates on American incomes at the top were high, the incomes at the top grew more slowly than incomes at the bottom. Since the tax rates came down in the 1980s, the pattern has been reversed. Higher incomes have been increasing at a much faster rate, while in terms of income the lower rungs have been stagnating. And the statistics show that the incomes of those at the very top, in particular the top tenth of the 99th percentile of the income pyramid, have been increasing fastest of all.
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