The problem for progressives is that it is not easy to build a Western European- or Scandinavian-style welfare state without a Western European- or Scandinavian-style tax regime, under which middle-income people pay much more in taxes than they would in the United States. One of the lessons of the Scandinavian success stories is that if you are interested in redistribution, it often is far more effective to do it on the spending side than on the taxing side. (Unfortunately, that depends in no small part upon the Scandinavian capacity for the effective and relatively efficient delivery of services, something for which U.S. public agencies show relatively little ability.) Imagine a situation in which you have an absolutely flat income tax and every household receives a bundle of services or benefits roughly equal in absolute dollar terms: The billionaire and the barista may both receive exactly the same $2,500 a month in services and benefits, but it means a hell of a lot more to the barista. I am not much of an enthusiast for universal basic incomes, but that is one of the better arguments for such a scheme. It applies, in a limited way, to welfare states more generally.
Conservatives have a related problem: If Republicans have demonstrated nothing else in this century, it is that the United States cannot eliminate the federal budget deficit, or even stabilize it, under our current tax system. And Republicans who also want to shrink the tax base by reducing or eliminating taxes on favored constituencies make the same error as progressives. For Republicans, that’s a political error, too: Ronald Reagan used to brag about all the low-income and middle-income Americans who were effectively taken off the income-tax rolls on his watch, but that created a problem for his political heirs, who still try to run on federal income-tax cuts in a country in which half of the people pay little or no federal income tax. Republican tax cuts end up being “tax cuts for the rich” because almost any substantial income-tax cuts in the current system would disproportionately benefit high-income Americans, who pay almost all of the federal income taxes.