Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 13

A large and increasing portion of government spending goes to transfer programs (such as Social Security, Medicare, and Medicaid) and national defense, neither of which directly helps the rich get richer. Given those facts, discuss the applicability of the benefits received principle in justifying progressive taxation. Is it possible that the rich do benefit more from national defense? Can you think of any ways that the rich also benefit from transfer payments?