Costs of the Welfare State

   Costs of the Welfare State:

·         Removal of incentives to work: Some people believe that there are greater rewards from earning benefits rather than actually working and hence unemployment will be increased.

·         Higher Taxation: The welfare state is funded by the taxation of those in employment, particularly those with higher and above average wages. If there is more need for the welfare state then these people will have to pay greater amounts of taxes even though they are not personally using it.