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Welfare for the (Relatively) Rich

June 2, 2009

Mickey Kaus recently asked the following rhetorical question about the lack of union concessions in the government financed GM reorganization:

Why should the government tax unskilled workers making $18 an hour, who haven’t bankrupted their employers, in order to protect unskilled workers making $28 an hour, who have bankrupted their employers, from having to take a pay cut?

The obvious answer is that they shouldn’t.

But, I was surprised to see this argument, because its logical extension is that there should not be any government expenditure that doesn’t benefit the least wealthy taxpayers as much as the portion of their tax dollars that are being used for it. In other other words if a dollar is taken from a poor taxpayer for a program, that person should get at least a dollar’s worth of utility from that program.

That is a pretty tough standard to satisfy. Almost all industry subsidies, scientific research, public works, and transportation programs would fail such a standard. Resorting to more ephemeral justifications like these programs benefit the entire country and such benefits flow indirectly to the poor taxpayer would also justify the GM bailout.

So I welcome Mickey Kaus as a supporter of the minimal state!

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