It breeds complacency, indolence, and corruption. Complacency and indolence can be seen in people not willing to work hard to make a living. Instead, people want an easy job, if any job at all, and expect to be paid a grotesque sum for doing it. They expect to be paid for mediocre work too. A good example of this is the "living wage" idea that goes with minimum wage. Just because you are doing something doesn't mean it's worth doing for what you are demanding in pay.
Indolence is this:
'The most chilling metric of all': Mike Rowe warns that 7 million American men are 'done' looking for work and have 'punched out' — here's why that's a serious problem
https://www.msn.com/en-us/money/mar...re-s-why-that-s-a-serious-problem/ar-AA14YeVv
People, particularly men, are opting out of working at all. When there is a welfare state that allows you to get by without producing, then many will choose not to produce. Others choose to turn to crime and the black market to make a better living than they could working a legitimate job. If you can shoplift thousands in goods a day with little risk of prison or other consequences, you shoplift. If you can sell drugs and make thousands a day rather then flip burgers you sell drugs. When the penalties for criminal acts are negligible and hardly enforced, you recognize that that route is economically viable to you.
Then there is the corruption that goes with this. You have a huge bureaucratic state that relies on heavy taxation to pay for the indolent and complacent. Those that aren't in that category are incentivized to find ways to avoid that taxation, regulation, etc. Thus, you end up with an ever-growing black market of goods and services that operate outside the 'system.'
As Italy Cracks Down on Tax Cheats, the Wealthy Are Ditching Their Porsches
https://content.time.com/time/world/article/0,8599,2109279,00.html
Take Italy as an example. The nation has oppressively high taxes. Tax cheating is a national pastime. Those that would have to pay the most find ways to avoid paying, legal and illegal. Their success causes failure of the tax system that is both oppressive and corrupt.
The result in the long run is the country becomes more and more corrupt. It accepts people cheating the system, even cheering them on. Black markets abound. The economy falls apart.
In the end, the government cannot sustain its welfare state and collapses in a revolution. The only way government can put that end off further into the future is to become more and more a draconian dictatorship.
