> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of JKSCHW at aol.com
> Sent: Thursday, January 20, 2000 2:44 PM
>
> Social Security isn't means tested. Is that throwing away money?
> Neither is national health in most countries. Or maybe you are not
> advocating means testing, or think the Bradley plan wouldn't. But why
> then would they need to know your income? Maybe to find out if they
> were serving the low income population? --jks
Social Security is means tested in the sense that benefits are determined by how much you made in your lifetime, although it is a regressive means testing in that the more you made, the more you are paid by the government. Not that social security overall is regressive since richer people pay in more over their lifetime, but there is a reasonable debate over whether purely universal programs are always better than means tested programs.
Universal benefits often use of a lot government funds on middle class and wealthier citizens, often essentially redistributing from middle class tax payers to middle class recipients with little economic redistribution. Social security is a good program, but for all its universality, the rich pay very little into it proportionate to their income. The argument for universal programs is that they are politically bulletproof, but social security is partly bulletproof because the wealthy are not taxed to pay for it, so they don't mobilize against it. National health care in a number of countries is funded heavily by national VAT (sales-type) taxes that are not particularly progressive.
The advantage of means tested programs is that the money spent is almost pure redistribution, largely at the federal level from progressive income taxes paid overwhelmingly by the wealthy directly to those most in need. For the same reason, those programs are under continual political assault.
Obviously, the ideal is a broad-based progressive tax where the wealthy contribute for universal coverage. But that still requires means testing on the tax payment side.
There are more serious policy downsides to means-testing, largely due to the "phase-out" of benefits which operates like a high marginal tax on additional income on those receiving those benefits. I think that is far bigger problem with means tested programs than the worries over paperwork.
-- Nathan Newman