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April 23, 2015

When progressives talk about rich and poor, they are sometimes accused of preaching class war. The classic, jaded response is to say, sure, there is a class war, but most of the time, only one side (the wealthy) is actively fighting. 

A battle brewing over at the State House provides a test case to see how these things play out in real life.  

The battle got started when Charlie Baker proposed canceling the Massachusetts Film Tax Credit in order to expand the state's Earned Income Tax Credit, a tax credit that puts extra money in the hands of working low-income parents.  Of course, some people who benefit from the Film Tax Credit are not wealthy, but many are, while everyone who gets the Earned Income Tax Credit is middle-or-low income. 

At a packed hearing earlier last month, both sides were out in force, filling up an auditorium at the State House. If you were there, and used only the evidence of your field of vision, you would have found it quite difficult to know which tax benefits more people.  

In real numbers, of course, working families make up a much larger portion of the state's population than employees of the Bay State's far-from-California-sized film industry.  From the perspective of sharing funds with more people (and, especially, from the point of view of reducing inequality and helping people make it into the middle class) the choice of supporting the EITC over the Film Tax Credit is a lay-up. So what's going on? Why aren't working families who could benefit from the EITC more visible than Film Tax credit supporters? At least six reasons stand out:

1.  Loss aversionThe most powerful force in politics is the fear of loss. (Remember "Take Your $@%^! Government Hands off my Medicare!" from the ObamaCare debates?) Film supporters stand to lose something they already have. That's way more motivating than telling working poor folks that they might get some new benefit, which could easily sound like pie in the sky.

2.  Poor people are unfairly shamed, and that silences them. While people who receive universal benefits (like Social Security) or middle and upper class benefits (like the tax deduction for home mortgage payments) are more likely to take civic actions like voting and showing up at community meetings, people who receive welfare benefits like Medicaid are often made to feel ashamed, and are therefore less likely to vote and participate.

3.  Organization. The film industry has unions, professional organizations, companies, etc., that make it easy to pass information around. That makes it easy to get people to call their legislators or show up at hearing. There are very few organizations of very low income people, so, even though potential EITC recipients abound, they are hard to contact and mobilize.

4.  Rich people. Wealthy people have time (or, at least, the power to purchase someone else's time). They have resources to hire strategists, lobbyists, etc. Admittedly, not everyone who gets the film tax credit is wealthy, but some of them are, with all the advantages that wealth confers. By definition, on the other hand, none of the potential EITC beneficiaries are wealthy.  

5.  Time poverty. EITC recipients are mainly working parents with children. Even compared to other low-income people, for example, low-income retired seniors, very few low-income parents have the time to schlep to the State House or even to participate in civic organizations in their neighborhoods. And many of the jobs they have don't give them the luxury of reading email throughout the day, where they might sign online petitions or take similar actions.  

6.  Demobilization.  Reminding people that they are poor is inherently de-mobilizing. New research by Adam Levine of Cornell points out an ironic truth -- telling people that they are poor is a powerful disincentive against taking political action. Reminding a working mom of her poverty, for example, might encourage her to try to spend more hours at her job, or more time with her family, but tends to reduce the amount of political activity she will do.

All these factors add up, and there's an important lesson for lawmakers here. If a room seems equally full of people on two sides of an issue, it is worth thinking about all the people who were not able to show up. 

This is a guest post by Avi Green, Director of Communications at the Scholars Strategy Network.

economic inequality, mapoli, Charlie Baker, film tax, EITC

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