Brief observation on the political economy of the welfare state

It is often observed by conservatives that the existence of a welfare state reduces the incentive to have a job. Of course it may also provide people with a means to pull themselves out of poverty, take greater entrepreneurial risks etc counterbalancing this incentive.

It occurred to me though that there’s another incentive effect which goes in the opposite direction, which is much less frequently remarked. The existence of a welfare state creates a political incentive for the middle and upper class to support policies to reduce unemployment & poverty wages in order to reduce their own tax bills. The existence of a welfare state makes your poverty my financial pain through taxes, incentivising political support for job creation, investment etc. by the upper and middle classes.

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