“The poor like taxing the rich less than you would think”
The Economist finds itself wondering why the poor wouldn’t be more supportive of redistributionist policies. After all, more wealth redistribution would ostensibly put more wealth in the hands of the poor, right? So why are they against their own self interest?
As it turns out, the poor oppose these policies because they don’t plan on always being poor. One day, they’d like to be rich (or richer) and don’t want their wealth redistributed when that happens.
Paradoxically, as the share of the population that receives benefits in a given area rises, support for welfare in the area falls. A new NBER paper finds evidence for an even more intriguing and provocative hypothesis. Its authors note that those near but not at the bottom of the income distribution are often deeply ambivalent about greater redistribution.
Economists have usually explained poor people’s counter-intuitive disdain for something that might make them better off by invoking income mobility. Joe the Plumber might not be making enough to be affected by proposed hikes in tax rates on those making more than $250,000 a year, they argue, but he hopes some day to be one of them.
There’s also an element too, I think, of Americans who are the most familiar with redistributive policies (food stamps, welfare, etc.) hating them the most. While the politicians talk about how helpful these programs are, the reality for many benefit recipients is that they’re frustrating, ineffective and humiliating.
They don’t want expansion of these programs. They’d rather become richer. Which is the attitude we should want. When those on government programs become content to live perpetually at the expense of others who are actually producing prosperity our society is in serious trouble.
Tags: socialism, Taxes, wealth redistribution
