Discussions of the welfare state often miss a key issue: marginal tax rates.
People often discuss programs that have universal coverage, which have high payroll taxes. But there is little justification for universal coverage, which normally crowds out the private industry in that area (such as annuities instead of Social Security).
Once one moves to means tested programs like Medicaid, it is possible to believe that the tax rates on the poor can be lower because the program is not being provided to everyone. But the effective tax rates on means tested programs can be quite large. The poor person must decide whether it makes sense for them to work more to secure income, even though that will cause them to lose benefits. Sadly, it is often rational for them to not work (or to work off the books).