This is the classic problem of universalism vs. targeting efficiency, but I'm
not sure I come down on the same side you do. On the universalistic side,
money for the poor requires, as a kind of informal political blackmail, money
for the rich (or at least the more affluent). Targeting focuses the benefits,
but risks the stigma of welfare and has all the other problems that you and
Nathan have been debating. Under ideal circumstances, I would prefer
universalistic benefits that are taxed differentially, because I think they
encourage the formation of more durable political coalitions. What's not clear
to me is whether you are defending targeting as a political necessity in these
politically constrained times, or as something you would choose even in the
face of more robust options. The former I can understand; the latter, I have
more trouble with.
Joel Blau
Max Sawicky wrote:
> It should be pointed out that we get into these problems of high marginal
> tax
> rates and rapid phase-outs because unlike every other country, we try to
> support families indirectly through the tax code rather than directly
> through universal family/children allowances. If we are going to spend $85
> billion, I'd much rather spend it that way.
> Joel Blau
> >>>>>>>>>>>>
>
> If you spread $85 billion over all families w/children,
> the poor would see less than they do now.
>
> The phase-out problem is no less present for a direct
> income transfer program. If you have no phase-out
> you limit what can be transferred. You can't very
> well have everyone paying negative taxes. If you
> provide more to the bottom -- in other words,
> redistribute -- you have to phase out to some
> extent. The more you give, the more you have
> to take away.
>
> mbs
