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by pqtyw
15 days ago
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Well off people do not allocate capital in a way that's socially or economically (on a national level) optimal. So the government has to do that for them (even if those who the majority of taxes personally benefit less from that than if they were allowed to keep that money). I don't think that's entirely unreasonable. After all there are hardly any personal incentives for individuals to invest into infrastructure, education or healthcare of people who can't afford it and plenty of other areas even if that's what allowed them to accumulate a significant proportion of not the overwhelming majority of their wealth over the long term. |
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But we're talking about a government subsidy for something people do have a personal incentive to invest in.
On top of that, the misalignment of incentives applies even more to government officials, who have perverse incentives to enrich cronies, make inefficient transfers to special interests in a specific range of "not currently voting for them but close enough to the line to be worth paying off" at the expense of the public at large, or just not care about getting a given thing right because their position is being secured by something unrelated.