Income Tax and Welfare

Paper Summary:

This paper examines how most social workers, politicians and those of the general public who support the welfare state do so in part because they believe welfare programs help to reduce the rate of poverty. It looks at how a growing number of critics assert that such programs in fact fail to decrease poverty, because too small a share of transfers actually reaches the poor, or because such programs create a welfare/poverty trap, or because they weaken the economy. It proposes a study to assess the effects of social-welfare policy extensiveness on poverty rates.

Outline
Discussion
Pros of Raising Income Taxes to Redistribute Income to the Poor
Cons of Lowering Taxes and Reducing the Amount Available for Income Redistribution.
Pros of Reducing Income Taxes
Cons of Reducing Income Taxes
Proposals
Ways of Funding Social-Insurance (Welfare) Programs
Conclusion

From the Paper:

"Reducing the amount of transfer payments ultimately will increase levels of both poverty and the maladies that are associated with it. Infant and child mortality, increased crime, lack of participation in society in general, and increased medical expenses born ultimately by society can all be the results of decrease social spending (Center on Budget and Policy Priorities web site). To quote a study by the Center on Budget and Policy Priorities: "Social insurance programs moved 1.4 million children out of poverty. Federal taxes, including the Earned Income Tax Credit, (EITC), lifted another one million children out of poverty. It is striking that taxes were nearly as effective as social insurance programs in moving children out of poverty because taxes alone would be expected to increase rather than reduce poverty."

More papers on Income Tax and Welfare:

• Essay # 27131 : "1996 Welfare Reform"
• Research Paper # 109513 : "Michigan Bond Rating Proposal"
• Persuasive Essay # 117476 : "Society's Child: The Working Poor"

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