I like reports by Michael Tanner because he doesn’t contradict my “It’s not what you get, it’s what you give” philosophy. In his most recent policy analysis, coauthored by Charles Hughes, he argues welfare in many European countries serves as an incentive to withdraw from economic activity, and the United States really isn’t in a position to criticize. Here are the bullet points from the intro:
- Welfare benefits in nine EU countries exceeded €15,000 ($18,200) per year. In six countries, benefits exceeded €20,000 ($24,300). Denmark offers the most generous benefit package, valued at €31,709 ($38,558).
- In nine countries, welfare benefits exceeded the minimum wage in that country.
- Benefits in 11 countries exceeded half of the net income for someone earning the average wage in that country, and in 6 countries it exceeded 60 percent of the net average wage income.
- In Austria, Croatia, and Denmark, the effective marginal tax rate for someone leaving welfare for work was nearly 100 percent, meaning that a person would gain virtually no additional income from working. In another 16 countries, individuals would face an effective marginal tax rate in excess of 50 percent.
- Benefits in the United States fit comfortably into the mainstream of welfare states. Excluding Medicaid, the United States would rank 10th among the EU nations analyzed, more generous than France and slightly less generous than Sweden. Thirty-five states offer a package more generous than the mean benefit package offered in the European countries analyzed.
