The Case Against Means Testing

More

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.

Jump to comments
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.
Get Today's Top Stories in Your Inbox (preview)

The Time JFK Called the Air Force to Complain About a 'Silly Bastard'

51 years ago, President John F. Kennedy made a very angry phone call.


Elsewhere on the web

Join the Discussion

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

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Politics

Just In