Kerby Anderson

Senator John Kennedy argues that the “Census Numbers Paint a Misleading Picture of Poverty in America.” When we discussed this op-ed on my radio program recently, I mentioned that we had a similar discussion with former senator Phil Gramm nearly six years ago. He made the same case in his book, The Myth of American Inequality: How Government Biases Policy Debate.

When the Census Bureau does a calculation about a family income, they do not consider non-cash benefits that individuals may receive from different levels of government. The bureaucrats argue that is only fair because people cannot spend non-cash benefits on anything they want. But Senator Kennedy reminds us that money is fungible. If you don’t have to spend money on health care, you can spend it on something else.

How many people live at or below the poverty line? The official figure is 11 percent. However, if you include non-cash benefits and cash payments from the government, the actual percentage is only 1 percent.

A single mother with two kids making $11,000 a year in part-time work is also eligible to receive refundable earned income tax credits, child tax credits, utility bill subsidies, Medicaid, free school meals and welfare payments. Her total income is $64,000. All those benefits are tax free. Compare that to a middle-class family that earns $64,000 but must pay taxes on that amount.

Perhaps you can see the concern. The accounting done by the Census Bureau skews both income inequality and the real percentage of people living in poverty. And these tax-free benefits become a disincentive to get off government dependency.

It’s time to have an accurate accounting of poverty in America.