Redistribution
POL 103
Thursday
April 23
Redistribution
1.1. Defined
Welfare state: role states play in protecting the economic and social well being of residents through redistributive taxing and spending programs
1.1. Defined
Public sector: government delivery of goods and services
Private sector: all economic activity funded outside of the state, by individuals or private corporations
Redistribution
1.2. Measurement issues
Crude measure:
Total amount and types of state programs offered to the general public: programs pertaining to old age, pensions; publicly provided healthcare; family support; job training and retraining programs and unemployment compensation; public education; and housing subsidies
1.2. Measurement issues
Measurement problems:
1.2. Measurement issues
Percent of GDP on social programs, including health, pensions, housing�(data from 2010)
1.2. Measurement issues
Tax or regulatory measures,�“submerged state”
1.2. Measurement issues
1.2. Measurement issues
Caveat: �spending isn’t the best measure of services
1.2. Health Care
Redistribution
2. Taxes and transfers
Two kinds of taxes:
2. Taxes and transfers
Transfers in general:
Redistribution
3. Origins and political logic
Why progressive transfers? Possibilities:
Redistribution
3.1. Private goods
Definitions:
3.1. Private goods
If mean wealth is higher than media wealth, then in principle a majority would favor transfer
More people would directly benefit from the transfer than would be directly harmed
But there are limits:
3.1. Private goods
Most estimates of “revenue-maximizing” tax rate are about 70%
3.1. Private goods
3.1. Private goods
So why are rates lower?
Theories:
Redistribution
3.2. Public goods
Why progressive transfers?
Redistribution
3.3. Transfers versus insurance
Some programs are about insurance
These programs are more about risk than transfer
Why Welfare States Exist
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Redistribution
4. Explaining variation
Why do some states have larger welfare states than others?
Things that may lead to larger transfers:
Note: the U.S. is unusual...
Redistribution
5. End of semester stuff
Course evaluations: