Fiscal crisis, financial crisis and the fragile welfare state

Authored by: Kevin Farnsworth , Zoë Irving

Routledge Handbook of the Welfare State

Print publication date:  July  2018
Online publication date:  June  2018

Print ISBN: 9781138631649
eBook ISBN: 9781315207049
Adobe ISBN:


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There is an ongoing tension – some would argue a contradiction – that goes to the heart of capitalist welfare states. On the one hand, states face ever-growing demands to provide more and better services. Some of these demands are made by citizens who desire better schools, hospitals, roads and rail services. Some of these demands come from the corporate sector: for better educated workers; better funded public research facilities; more generous subsidies; public bailouts; and increased injections of public spending to increase macro-economic demand. Few, however, appear to want to pay higher taxes to fund all these services. Citizens of ordinary means are resistant to paying more, especially when the super-rich appear to be so reluctant to pay their fair share. Politicians also appear to have little appetite to tax the wealthy for fear of dampening their entrepreneurial spirit and causing them to flee to less punitive tax regimes, while increases in corporation tax are largely unthinkable. In any case, the wealthy and large corporations can employ various means to avoid paying even the tax levels laid down by law.

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