Thursday, October 7, 2010

On means-testing

Reihan has a post up about Britain's Tory government and their effort to means-test various benefits. He quotes James Forsythe:

Now, if you accept that the poor are currently being taxed to provide child benefits for the rich (a slight exaggeration given that higher rate taxpayers contribute far more than they take out in services) then this argument applies with equal force to all other universal benefits. Why should someone on £17,000 a year pay taxes to help cover the cost of Felicity Kendall’s pension or Judi Dench’s winter fuel payment?
Labour understands this point and that Osborne has, as I say in the magazine this week, laid a trap for them: if they accept the child benefit cut they’ll be accepting a shift from a welfare state to a welfare safety net.

I just wanted to point out that in the US, we're still struggling to set up a proper safety net. That said, it still makes sense to save some money in the states by means-testing Medicare and Social Security. Note that the hated Obamacare already is. The amount of subsidy offered for insurance depends on income. As the country tries to get its balance sheet back in order, means-testing is a logical place to look.

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