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Adam Schaeffer of the Cato Institute manages the fairly impressive feat of beating up on me in a blog post (I am an "ingrate," along with Matt Yglesias and Felix Salmon) without mentioning or responding to the argument I was actually making. So hey, let me just go ahead and make it again: The tax code's definition of a charity is too broad. Do you disagree, Adam?

Still, the separate question Schlaeffer asks is an interesting one: "Why shouldn't we charge rich parents tuition to attend public schools? If a charitable deduction for private schools is so bad, why isn't a free public education even worse?" So let me take a crack at it.

In general, means testing public services is a good idea, for obvious reasons. A concept of justice that said, "everyone gets the same amount, regardless of how much they need or deserve" would not be a very convincing concept indeed. But the case for means testing is often overstated and sometimes treated as gospel. And I can think of five reasons why it shouldn't be:

1. Means testing creates some inefficiencies. Deciding to make some government service contingent on one's demonstrated need requires creating some administrative mechanism for measuring need. This is costly and difficult. It is also (as I'm sure I don't need to tell the good people of Cato) potentially incentive-distorting: limiting a public service to people below a certain income should, at the margin, reduce the incentive to rise above that income.

2. Means testing can reduce the political support for a service. This isn't that complicated. If a service is provided to everyone in the United States, then everyone in the United States has some incentive to support it. If a service is provided to only the neediest individuals, then not everyone has an incentive to support it. (As an historical matter, my understanding is that this is one reason why social security benefits are not means tested.)

3. Means testing can reduce the quality of a service. This is related to #2. If not everyone in a given community benefits from a service, then the community will be less inclined to offer a robust form of that service. (And I think both #2 and #3 are exacerbated by the fact that the individuals most in need of public services tend to have the least political power.)

4. Means testing can create stigma, since it identifies some people as needy. (That might sound a bit hoity-toity, but I think it would be important in the context of a public education.)

5. Means testing can be immoral. Some benefits of citizenship are thought of as rights -- things to which we are entitled regardless of expected benefit or demonstrated need. No one, for instance, has recently suggested that voting should be means-tested.

Over at the Economix blog, Catherine Rampell produces the following graph, which shows the relationship between SAT test score and family income:

Greg Mankiw calls this the "Least Surprising Correlation of All Time" and writes:

Of course! But so what? This fact tells us nothing about the causal impact of income on test scores. [...] This graph is a good example of omitted variable bias, a statistical issue discussed in Chapter 2 of my favorite textbook. The key omitted variable here is parents' IQ. Smart parents make more money and pass those good genes on to their offspring. [...] It would be interesting to see the above graph reproduced for adopted children only. I bet that the curve would be a lot flatter.

And sure, it wouldn't be surprising to find a correlation between high IQ and high income. And it wouldn't be surprising to learn that "intelligence" is partially inheritable. But the vaguely deterministic suggestion that smart parents "make more money and pass those good genes on to their offspring" is a laughably crude description of how real life works.    

Why not? Lots of people are upset that Nancy Pelosi and Robert Byrd want to do this, but I'm not sure I buy their arguments. Ted Kennedy wanted to to pass a major health-care reform bill. He called it the cause of his life. It's not as if renaming the bill would be contrary to his wishes or in some sense ironic. (Like, perhaps, renaming a gigantic public airport after a man who fired thousands of air traffic controllers and favored limited government more broadly.)

The legislative eulogizing might (or might not!) make the bill more likely to pass, and the intentions of the legislators might (or might not!) be a mix of the genuinely commemorative ("he would have wanted it") and the disingenuously opportunistic ("we want it"). But there should be nothing surprising or unseemly about a legislator motivated by a heartfelt belief that the best way of honoring Kennedy would be to pass a bill for which the man struggled. And the political effects of a heartfelt Kennedy commemoration are no more or less "fair" than the political effects of a 9/11 commemoration or Ronald Reagan's death in the summer or 2004.

On the other hand, I do have some sympathy for Jonah Goldberg's argument that the left can't have this both ways: It shouldn't expect to mobilize Kennedy's memory for health-care reform while maumauing Kennedy's posthumous critics. But this is mostly because I don't think we should have a general principle against posthumous honesty. If Goldberg has a moral principle that discourages such criticism (and he seems to), he should surely uphold that principle and hold his tongue no matter what the left does.

Last week I wrote a post that included the following taxonomy of "supply-side economics":

The "strong" version of the supply side argument is that tax cuts will generate enough growth to increase tax revenue. (Not to be confused with the general Laffer Curve proposition that tax cuts can do this, which will probably be true under some circumstances -- say, if a tax rate went from 100% to 99%.) The "semi-strong" version is that tax rates are the key factor governing economic growth. And the "weak" version is that the growth and efficiency generated by lower taxes is more important than the equality generated by redistribution. (The "weak" version pretty much just restates the big difference between the left and the right, so it's really quite general.) 

I tried using this to make the point that, contra Greg Mankiw, "the general proposition that taxes affect incentives" is not unique to supply-side economics. Indeed, I wrote, "Everyone believes that!" Dan Mitchell of the Cato Institute wrote me a pretty long email disagreeing with this. I'll quote a snippet:
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