ENDING THE WELFARE STATE:

As structural budget deficits grow to trillions of dollars and politicians promise even more spending, "tax the rich" has become a progressive rallying cry. Meanwhile, conservatives typically prefer spending cuts to reduce the deficit.

There is a simple bipartisan compromise: Cut federal spending on the rich. This would accomplish both the progressive goal of increasing government redistribution from the rich to the poor, and the conservative goal of shrinking government. [...]

Critics contend that stronger income-relating of federal benefit programs will make them less popular and easier to cut. But means-tested programs have proven extraordinarily politically resilient. Since 1965, federal antipoverty spending has steadily risen from 0.5 to 4.0 percent of GDP--across Republican- and Democratic-led governments--and programs like Medicaid have been expanded with the strong support of state referenda.

Furthermore, "tax the rich" advocates should recognize that--if they are worried about maintaining wealthy families' vital support for federal programs--cutting their benefits and raising their taxes are two sides of the same coin. Both options break the link between taxes and benefits and make the programs a worse deal for the affected families. If wealthy people support Social Security because their taxes finance their future benefits, then doubling their Social Security taxes (by eliminating the payroll tax wage limit) without a corresponding benefit increase would undermine their program support just as much as a direct benefit cut. So if we're willing to tax them, it makes sense to cut their benefits first.

Upwards of $1 trillion can be saved over the decade (and significantly more after) from reducing upper-income benefits. 

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