From the Editors of National Review, The Fifty Year War.
Poverty in the United States is an economic issue, to be sure, especially as it relates to economic growth, the most important driver of employment and wages. But it is also a cultural issue. Well-off U.S. households are made up overwhelmingly of married couples in which one or both spouses are engaged in full-time employment. Poor households are the opposite. Poor households have on average 0.42 full-time workers in them, and 68 percent of their members are entirely unemployed; only 17 percent of them consist of married couples.
Heaviest of all are the indirect burdens — the regulations, taxes, and expenses inflicted on employers that inevitably are passed on, in some measure, to employees, and particularly to those employees without the in-demand skills that put them in a stronger negotiating position. While on paper our taxes and regulations are targeted precisely, the economic fact is that those burdens are borne collectively, with costs shifted throughout the economy. It should surprise no one that they fall with disproportionate weight upon low-wage workers. The Democrats have for generations ignored that fact, and pronounce themselves shocked that our highly redistributive system of taxes and benefits has done so little to alleviate poverty.
The more benefits that are bestowed on the unemployed that are lost when they work, the higher the marginal tax burden is on those at the bottom. The marginal tax rate on the poorest is far more problematic than the few points bantered about when we talk about the rich. The campaign to target the burdens of the cost of our welfare state is delusional political theatre. Higher costs heaped on producers are ultimately born by the consumers. It is foolish to pretend otherwise.