The Great Redistribution Machine

Tuesday, March 27th, 2007 12:32 pm by Neal

We saw this dismal report yesterday and discussed it with HR. If you take medication for depression, you may want to double-up on it before continuing because these statistics are disturbing.

From “The Great Redistribution Machine” (NOTE: The Washington-based Tax Foundation’s new report is here).

The Tax Foundation folks grouped together all federal, state, and local government spending and revenues. Then they looked at the net effect on income quintiles. The results confirmed the extent to which American government has become a redistribution scheme. The bottom 20 percent of households in income received about $8.21 in government spending for every dollar contributed in taxes (they don’t pay income taxes, of course, but they do pay a variety of other taxes, such as on sales and property). In the middle quintile, households got $1.30 in government stuff for every tax dollar. You mathematically inclined know where I’m going with this — someone has to pay the bills. It’s basically the top quintile, who consumed 41 cents in government benefits for every dollar surrendered. In 2004, the amount of income redistributed in this manner was between $1 trillion and $1.5 trillion.

Read that last sentence again.

We spend so much time arguing about the constitutionality of this or that — about protecting a freedom here and losing one there — that we fail to see the forest for the trees. Consider these two quotes:

“We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.”
— Davy Crockett

“From each according to his ability, to each according to his needs!”
— Karl Marx

Consider the contrasting philosophy expressed by these two statements. Now, which statement more accurately describes the economic reality of the United States in 2007 as presented by the Tax Foundation’s report?

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