Thursday, 27 September 2012

Universally populist nonsense

Quick post on the nonsense that both the UK LibDems and Scottish Labour have come out with in the past few days: why assume revenues are fixed and therefore that benefits paid to wealthier sections of society are benefits that cannot be paid to lower income sections of society?

The tax and benefits system has to be looked at as a whole and therefore, of course universal benefits are affordable - just raise taxes. A 1% tax rise on Alan Sugar's income would not only pay for his bus pass but also for many many other poorer pensioners' bus passes.

Further, looking at the efficiency and political economy of universal vs means-tested benefits:
# universal benefits are cheaper to administer
# universal benefits are associated with the unifying externality that wealthier sections of society are more likely to 'buy-in' to the welfare state. If 'your' taxes are not just to be given away to 'other' people, then perhaps you become more predisposed to paying your taxes and recognising the benefits of aligning the organisation of public services with whole population benefits rather than treating them as consumer services that an individual purchases.

Some good relevant comment:
# Chris Dillow

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