Should The US Tax Government Benefits In Excess Of The State Poverty Level?

From Political Calculations Blog, "Are U.S. Welfare Benefits Too Generous?"

Source: Political Calculations

Here's an idea: let's require that the federal, state and local government agencies responsible for dispensing welfare benefits issue 1099 tax forms to welfare recipients documenting the full value of the benefits they received and also to the IRS.

The welfare recipients would then have to report this unearned income on their federal tax returns. Any amount provided in excess of the difference between the federal poverty level that applies in their state and any regular income they may have earned should then be taxed at the same rates that apply for unearned income.