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PSCI2012 Chapter 12 Welfare State *when talking about development: talking about poor countries; when talking about welfare state: talking about wealthy countries  Tension: democratic politics is realm of equality while capitalism economics is realm of inequality o Every democratic state engages in some progressive redistribution  Great variation in how much is redistributed and how I . Welfare State A. What it is and how it works  Old age  Healthcare  Family  Employment  Education  Housing B. Why it exists 1. Perceived need for progressive taxation and redistribution  Progressive taxation: occurs when individuals’ tax burdens go up as their incomes go up  Regressive taxation: taxes that tend to benefit relatively wealthy people more than relatively poor people  Progressive redistribution: programs act like Robin Hood and take from richer folks and give to poorer folks  Lower than expected because... o Fear of capital flight, perverse incentives o Belief that poor people deserve fate o Poor folds believe they’re better off than they are, or will be o Golden rule: those who have gold make rules (wealth = political power) o Social insurance: forms of insurance available to everyone regardless of ability to pay  3 reasons this is provided: 1. Political iden