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An aside (not necessarily aimed at you): why is taken for granted that the poor must be motivated via the stick (reducing benefits), while in contrast the rich
by jonathansizz 11y ago
An aside (not necessarily aimed at you): why is taken for granted that the poor must be motivated via the stick (reducing benefits), while in contrast the rich are motivated by carrots (by reducing the top level of income tax, wealth taxes, etc.)?
Surely if we tax the rich more, they'll have an incentive to work harder to make up the shortfall?
Similarly, if we reduce taxes on the poor, they'll be motivated to work more as they'll be keeping more of what they earn (especially when we consider the much greater marginal value that extra dollars have to them).
- yummyfajitas 11y agoIn all cases, I favor increasing dUtility/dWork. Currently the utility gains to the poor from increasing work are nearly flat, and often negative. Note the graph in this post, illustrating the disposable income gains both with and without transfers: http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs.html http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs... Replacing welfare with work would increase this, since incomes would go down without work. In contrast, taxing anyone (rich or poor) would decrease dUtility/dWork. Unconditional wealth transfers also decrease dUtility/dWork due to diminishing marginal gains.