Welcome to the entitlement state

by Ryan Streeter on July 18, 2012. Follow Ryan on Twitter.

The middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

That’s from a recent Greg Mankiw post.

Mankiw is talking about some alarming data in the new CBO report on taxes and transfers (if you’ve got time, download this Excel table and have a look at some of the data, which is really interesting).

What he’s focusing on in the post is the taxes paid less transfers received. Here’s how it looks:

Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent

Top one percent: 28 percent

So the bottom 20% receive $3 back for every dollar earned. But as Mankiw points out, what is especially alarming is that the middle quintile is now getting more back in transfers than it pays in. That quintile was at +14 in 1979.

Even though these figures are a product of recessionary times, Mankiw points out that  in previous recessions we did not see the same kind of thing.