My stepdaughter was just like your s-in-law. S-daughter works, pays taxes, but her annual refund is way more than she pays in. (single parent, 2 kids, no $ help from dead beat dad, etc.). She used to get HUD housing, food stamps, the whole nine yards, while working. All of which drove her Dad up the wall. He has helped to support his parents since he was in his mid-20's (long story); in his early 30's started a business which now employs about 60 people, etc.
One time when she came to him for $$ (very frequent occurrence) he gave her Atlas Shrugged and told her to read it. Every time she came to him for $$ he talked to her about financial and personal responsibility, the effects of socialism, etc. Every time she asked for $$ he sat her down again for "the talk". Every time she heard about how the only money the gov. gets is taxpayers money, etc. The gov. doesn't just print money when it needs it, Yes, she would get financial help from her Dad, but only after "the talk". One year for Xmas she got framed copies of the Constitution and Bill of Rights.
She started to get it. When the tax rebates came around she said "I'm not getting a rebate but that's fair because I got all my taxes back". She now emails us articles about conservative thought, etc. She's off HUD and all assistance. And yes, the minute she starts to whine she still gets "the talk", from both of us.
Were we "hard" on her? Yes. Was it worth it? Yes. Not only for what she has learned about how the world works but also she is her children's main influence. and there was no way we were going to let that be a socialist influence. The only whine she is now allowed around us is when she whines about liberals.