Journalism Center on Children & Families
October 29, 2010
The U.S. government has a history of helping families built assets. In fiscal year 2009, the federal government spent nearly $400 billion on policies that aimed to help families buy homes, run businesses and save for their children's education. A new report by the Annie E. Casey Foundation and the Corporation for Enterprise Development finds that these policies are slanted toward the wealthy and hurt low-and middle-income households.
The report finds that most federal subsidies aimed at cultivating wealth go to the wealthiest taxpayers. More than half the benefits went to the wealthiest 5 percent of taxpayers in fiscal year 2009. Certain tax deductions, credits and preferential rates are directed toward these more affluent taxpayers, enabling them to receive an average $95,000 in assistance.
Low-income families are denied the opportunity to build their savings and build wealth, according to the report. The authors say much of the federal policy that builds assets is administered through the tax code, which allows the federal government to naturally privilege those who pay the most taxes. Policies that successfully encourage savings in low-income families, such as programs that provide matched-savings accounts, become the brunt of political campaigns.
The report urges Congress to cap the biggest tax deductions and invest part of the cost savings in programs that would encourage low-income families to build savings and relieve the squeeze middle-income households feel in today's tighter credit markets.
Published in September 2010, the report is co-authored by the Corporation for Enterprise Development, a nonprofit that focuses on expanding economic opportunity, and the Annie E. Casey Foundation, an organization dedicated to disadvantaged children and families.