4. Tax Expenditures and Social Policy

It is common among contemporary scholars comparing the development of the American welfare state to European nations to note that the USA appears to lag far behind the other developed industrial democracies. By the mid-to-late nineteenth century, many European countries, even yet to fulfill full male enfranchisement, had already begun to form the elements of a national welfare state. Pension and old-age income security, unemployment insurance, increasing protection from child labor, and assurance of labor union coverage of large swaths of the working population were enshrined in national legislation and other elements of “birth to grave” benefits were taking hold in European nations. An array of housing programs did much to assure a substantial proportion of the population access to housing and at least a basic, if limited, system of health care was made available. In contrast, in America, these elements of a welfare state lagged far behind. While there was a quite extensive system of state-level pension systems for widows and Civil War veterans, albeit fragmented and widely varying among the states in the American federal structure, little else of an overt welfare state, especially, was visible at the national level. Only in 1913 was a national income tax imposed throughout the USA (if restricted to only the very highest income groups), unemployment insurance was unevenly available only among some states (and not at all legislated in many), a universal old-age income security system did not exist, welfare benefits to the poor were paltry, and health care was almost entirely private. And, there were very few housing programs in the USA to assist families to secure decent, affordable housing.