Thursday, December 20, 2007

The U.S. Government as Robin Hood

Except it's "legal", of course. Here is Alex Tabarrok's accounting:

In a generous accounting the rich get 26% of the benefits of federal spending and pay 68.7% of the costs. In percentage terms the rich get about 37 cents on the dollar.

Alternatively stated about 63 cents of every dollar in taxes paid by the rich is transferred down. Given that the median voter is a taxeater not a taxpayer we should not be too surprised, although this is a smaller number than I would have guessed before I did the calculation. From an efficiency point of view we should be happy that the rich don't get too much - transferring resources creates a lot of waste but transferring resources from the rich to the rich is especially wasteful.

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