Taxing Hard-Up Americans at 95%

Taxing hard-up Americans at 95%

America’s welfare state is not working nearly as well as it should

Sep 7th 2013 | AUSTELL, GEORGIA AND BOSTON, MASSACHUSETTS |From the print edition

*

*

AFTER her son was born in 2008, Melissa Devilma—homeless, jobless and alone—needed help. The welfare system stepped in: she received $478 in cash and $367 in food stamps each month, along with housing assistance that lowered the rent on her two-bedroom apartment in Boston to $131. Including health care, taxpayers subsidised her to the tune of $33,000 annually. Ms Devilma used the money to go to college and earn a bachelor’s degree. She wants to get off the dole.

But she says that many of the other welfare recipients she knows are reluctant to seek work or an education. Life in the system is hardly gold-plated, but it is comfortable enough. Even Ms Devilma admits that, if it were not for her son and the recent expiry of her cash aid, she would rather live on welfare than take an entry-level job at McDonald’s, which she considers unsuited to her level of education. As it is, she would take any job “just so I have that little money to provide for him”.

In this section

* To bomb, or not to bomb?

* Fast-food condemnation

* Smother my neighbour

* Some work for nothing

* Taxing hard-up Americans at 95%

* Farming as rocket science

* Correction: Maine

Reprints

Related topics

* Boston

* Economics

* Poverty

* Insurance

* Health insurance

Policy wonks have long debated the extent to which welfare discourages work. Clearly, it can. In very poor countries, where the choice is either to work or to starve, people work long, back-breaking hours growing food. In rich countries, government safety nets limit how far anyone can fall. Yet these nets are hard to design. Welfare states must balance the desire to keep people out of penury with the equally humanitarian desire to not let them drift into lives of indolence and despair....