Friday, December 7, 2012

Implicit Taxation

http://economix.blogs.nytimes.com/2012/12/05/poverty-should-have-risen/

A provocative piece, but not the right way to approach the safety net in my opinion.  By Mulligan's logic, there is no floor for how low someone's living standard can go--they will always be bearing a portion of the loss.  I think the trick for minimizing disincentives is not only getting the floor right, but also creating an economic pathway so that the choice at the margin isn't between living at the poverty line and living just above it, but rather, living at the poverty line and advancing substantially beyond it.

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