The NYT told readers that the Republican proposal to prohibit people with income of more than $1 million a year from receiving food stamps and unemployment insurance:
“demonstrates an increasing desire among members of Congress to find some way to make sure that the wealthiest Americans contribute more to reducing the deficit and paying for middle-class tax relief.”
As the piece notes, it is almost impossible to find any millionaire who received food stamps. The article reports that millionaires received a total of $20.8 million in benefits in 2009. This is less than 0.0007 percent of the budget and less than 0.02 percent of the cost of maintaining the Social Security payroll tax cut for another year. It is roughly equivalent to an increase of 0.01 percent on the income of the richest one percent.
It is far from obvious that the purpose of a proposal that would have almost no impact on the overwhelming majority of rich people is in fact motivated by a desire to “make sure that the wealthiest Americans contribute more to reducing the deficit and paying for middle-class tax relief.” In fact, if anyone looks at the numbers, one could get the opposite impression since these proposals are being presented as alternatives to proposals to have a surtax on the income of the richest one percent. Such taxes would be a much greater expense to the richest one percent.
The Republican proposal also has the advantage of undermining the universal character of a program like unemployment benefits, for which the rich made contributions just like everyone else. This could be a first step in means-testing the program, which could then make it into an anti-poverty program rather than an insurance program.
Denying unemployment benefits to millionaires can be seen as comparable to denying the charitable tax deduction to millionaires. They certainly do not need it, but they have as much right to a deduction for charity as anyone else.