The Left- and Right-wing political power design: Welfare policy dilemma with low income relief (htm)

Joseph E. Mullat, independent researcher

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The study summarizes our vision and conviction of a long-term behaviour of low-paid citizens by the redistribution of public goods. In this regard, it should be noted that in 1962 Milton Friedman proposed a similar flat scheme of income redistribution, called a negative income tax system -- abbreviated NIT. The amount of primary and non-primary public goods, and taxes can be a subject of ongoing negotiations between, as taxpayers’ electorate is represented, left- and right-wing actors-politicians. The analysis is based on the assumption of a fundamental difference between the social system and the public sector that provides vital public services. Our view on social system is without empirical and conceptual justifications. However, we deal with a theoretical question of how a fair and egalitarian redistribution of income is achieved for all. We perceive that the public policy of the State, as said, consisting of two key actors-politicians. Politicians must determine the slicing of the "wealth-pie" -- a division that results in wealth-related taxation of citizens. The first actor -- the Politician nr.1 -- is struggling for citizens' legal and moral rights to the primary needs, e.g., social transfers or services, and benefits. The second -- the Politician nr.2 -- in response thereto, is advocating for such as the provision of public services -- citizen's non-primary but vital goods. The third actor-partaker has only a veto rights, representing taxpayers implicitly. Hereafter, the partaker prefers personal consumption higher than moral understanding and social responsibility, public activities and services. Consequently, citizens' by defecting to other side might initiate a collapse of negotiations by putting voting manoeuvrings of politicians at risk of breakdown. When the collapse is looming closer, politicians might be forced away from the negotiating table prematurely. The dilemma, also called the Welfare Policy Dilemma, in other words is: How do we ensure a Negative Income Tax level without risking the premature collapse of negotiations. We claim that 50% of median income is close enough to what might be considered as a realistic solution to this problem. The aim of the society as a whole was to ensure by left-right wing political power design the just and fair public spending to all citisens.

This work has a connection to, what is called now, "The Bounded Rationality," see A. Rubinstain (pdf). Actually, bounded rationality was a topic of M.A. Aizerman and A.V. Malishevski work (1980) "Some Aspects of the General Theory of best Option Choice," (pdf)