November 25, 2002
From the desk of Mindles H. Dreck:Thoughts for the "New Plutocracy" Crowd
Instapundit points out an article about Tyler Cowen. Here's an interesting excerpt from one of his papers:
The net effects of the United States Social Security System are complex, and I do not count them as part of the welfare state in this paper. In any case most of the redistribution is across generations rather than to the poor per se. Earlier generations (the current elderly) get the best deal and subsequent generations receive increasingly inferior deals, given the pay-as-you-go feature of the system (e.g., the very first generation received benefits but did not pay a comparable tax burden). More generally, returns are tied to what individuals put into the system. Many aspects of Social Security are regressive, given that the payroll tax stops at $76,200, the poor start working earlier (thus increasing their contribution) and tend to die sooner, thus lowering their payout.Many of the largest and most expensive government programs benefit the rich or the middle class, rather than the poor. Christopher Jencks estimates that in 1980 only one-fifth of all social welfare spending was explicitly aimed at the poor. Subsidies to higher and lower education do most for the upper middle class. The real value of public goods is greater in wealthy communities, even relative to local tax expenditures. Many health care subsidies benefit the elderly, who tend to be wealthier than the national average. Our tax system is only weakly progressive, all things considered, and many kinds of taxes, such as sales taxes, have a regressive impact. Milk price supports, most tariffs, and corporate welfare are but a few of the many regressive policies enacted by the American government.
So that was the situation in 1980... Posted by Mindles H. Dreck at November 25, 2002 09:06 AM | TrackBack | Technorati inbound links