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by erikbern 3353 days ago
Somewhat speculative, but as a Swedish person living in the US, a huge difference between the gov't spending is that very little is means tested in Sweden. Doesn't matter how much your income is, you still receive child allowance, extremely subsidized child care, schools, etc.

As a consequence, the welfare system is as much of a transfer between rich and poor as it is between different parts of life. And I suspect the willingness to pay higher taxes is that (almost) everyone "benefits" from the it at some point (putting it in citation marks since there's no free lunch obviously).

In contrast, US has far more means tested programs like SNAP etc, and the things that the wealthy benefits from are things like mortgage interest deductions, which are not seen as gov't spending in the same way. Which I think goes a long way explaining the tax adversity in the US.

3 comments

> very little is means tested in Sweden. ... As a consequence, the welfare system is as much of a transfer between rich and poor as it is between different parts of life.

This is an important insight. It is the reason the US social security system is presented as an "insurance scheme" that "everyone pays into" rather than what it actually is in practice: payroll taxes and payments to various people. Medicare pays out regardless of income.

I used to wonder why social security wasn't means tested (i.e why they should send Bill Gates, or even me, a check). Well, there's a lot of literature on how benefits are distributed and their popularity (hint: make it look like you're handing out to the middle classes). Without it, you get the US's punitive approach to much of welfare, the modern day equivalent of Victorian poorhouses.

Social Security takes this theatre to absurd lengths, by the way, even sending out letters purporting to show how much is "in your account", printing out the bonds that it purchases in putting them in physical file cabinets (I'm not kidding) and generally maintaining the fiction in full movie style. I can't tell you how many otherwise intelligent people I've spoken to who have been taken in by this ruse, and support social security despite opposing "welfare." I wish the government did more of it!

An advantage of universal systems is that because everyone is treated the same and benefits, it is less likely to create critics of the system from people who would only criticize it because it’s unfair that they don’t benefit. With less critics of the system, the system is more stable and less likely to be undermined and dismantled by future governments.

The progressiveness of a universal system still exists, whereby lower income persons benefit more than higher income persons, it’s just expressed via a progressive tax system, and not means testing.

That's a great point. Means testing is portrayed as fairness because only people that really need something will be the ones to get it...but that ends up being something that makes everyone who makes just a little too much to get the benefit really angry.
The universal approach is also immensely less complicated, both for the government and the beneficiaries.

It also doesn't create a "marginal tax" trap where if poor people get a higher income, they can lose 100% or more of it to lost benefits.

It fundamentally shifts the debate from "this is a human right" to "this is charity".