The Case Against Means Testing


Adam Schaeffer of the Cato Institute manages the fairly impressive feat of beating up on me in a blog post (I am an "ingrate," along with Matt Yglesias and Felix Salmon) without mentioning or responding to the argument I was actually making. So hey, let me just go ahead and make it again: The tax code's definition of a charity is too broad. Do you disagree, Adam?

Still, the separate question Schlaeffer asks is an interesting one: "Why shouldn't we charge rich parents tuition to attend public schools? If a charitable deduction for private schools is so bad, why isn't a free public education even worse?" So let me take a crack at it.

In general, means testing public services is a good idea, for obvious reasons. A concept of justice that said, "everyone gets the same amount, regardless of how much they need or deserve" would not be a very convincing concept indeed. But the case for means testing is often overstated and sometimes treated as gospel. And I can think of five reasons why it shouldn't be:

1. Means testing creates some inefficiencies. Deciding to make some government service contingent on one's demonstrated need requires creating some administrative mechanism for measuring need. This is costly and difficult. It is also (as I'm sure I don't need to tell the good people of Cato) potentially incentive-distorting: limiting a public service to people below a certain income should, at the margin, reduce the incentive to rise above that income.

2. Means testing can reduce the political support for a service. This isn't that complicated. If a service is provided to everyone in the United States, then everyone in the United States has some incentive to support it. If a service is provided to only the neediest individuals, then not everyone has an incentive to support it. (As an historical matter, my understanding is that this is one reason why social security benefits are not means tested.)

3. Means testing can reduce the quality of a service. This is related to #2. If not everyone in a given community benefits from a service, then the community will be less inclined to offer a robust form of that service. (And I think both #2 and #3 are exacerbated by the fact that the individuals most in need of public services tend to have the least political power.)

4. Means testing can create stigma, since it identifies some people as needy. (That might sound a bit hoity-toity, but I think it would be important in the context of a public education.)

5. Means testing can be immoral. Some benefits of citizenship are thought of as rights -- things to which we are entitled regardless of expected benefit or demonstrated need. No one, for instance, has recently suggested that voting should be means-tested.

Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

Why Is Google Making Human Skin?

Hidden away on Google’s campus, doctors at a world-class life sciences lab are trying to change the way people think about their health.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Videos

Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.

Video

How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Politics

Just In