The Limits Of Means Testing

Krugman sketches them for Medicare:

Remember that we’ve just been through a ferocious debate over whether $250,000 a year makes you rich, with $400,000 a year working stiffs crying poverty, declaring that they couldn’t possibly afford to pay Clinton-era tax rates; do you imagine that we’ll be able to set a lower bar on denying Medicare benefits?

So maybe, maybe, we’d end up means-testing for the top 2 percent or so of the population.

But while there’s some money to be gotten by taxing the top 2 percent they have more than 20 percent of the income they account for roughly their pro-rata share of benefit costs that is, the richest 2 percent account for around 2 percent of Medicare expenses. (Maybe a bit less because they’re healthier than the average American, maybe a bit more because they live longer.)

Drum does the math on Social Security an arrives at a simuliar answer.