Why Does the Government Take from the Rich and Give to the Poor?

Funny… did you hear about the recent tax cuts that hugely benefited the rich? How about the loopholes that rich people get to take advantage of, which result in many rich people and corporations paying 0 in taxes? The observation should be that the Government receives money primarily from wealthy individuals and gives it to other wealthy individuals or the middle class.

The Government and the Rich vs. the Poor

These discussions often revolve around the idea that the government takes from the rich and gives to the poor. However, this is based on a false premise. Republican governments typically cut taxes on the rich and cut benefits for the poor, which might seem as though they are taking from the poor and giving to the rich. However, the government still takes more from the rich because that is where the money is, and gives more to the poor because they need it more.

Redistributing Wealth: A Misleading Term

There are discussions of policies that redistribute wealth from the poor to the rich, but they are not phrased that way. Some examples include recent Republican proposals to cut Medicaid, which benefits the poor, and Republican tax plans that cut programs the poor rely on, such as food stamps, to fund cuts in top tax rates. Therefore, these cuts represent a transfer of wealth from the poor to the rich.

Some argue that this isn't redistributing wealth but merely stopping redistribution. However, a more accurate way to evaluate the impact is to compare the status quo to the consequences of the proposed changes. If a policy results in the wealthy getting more money and the poor getting less, compared to current law, it is indeed a redistribution of wealth from the poor to the wealthy.

Is It Theft or Fairness?

The phrase "redistributing wealth" is often seen as loaded and can imply theft to those who are financially better off. However, if we look at it from the perspective of the working class and the poor, it sounds like a reasonable change. The truth is that literally all taxation is a form of wealth redistribution because the wealth never goes back to exactly the same person who paid the taxes. When the government spends money on infrastructure, education, research, and other programs, it is redistributing wealth. This is especially true in a progressive tax system, where wealth is redistributed from the wealthy to the less wealthy by definition.

Complicated Policy Debates

While the concept of wealth redistribution is often simplified, it is a complex issue. When Republicans talk about wealth redistribution, it is generally done derisively, making it sound scary. When Democrats talk about wealth redistribution, they should avoid the term because it can be misunderstood and maligned. Instead, they often talk about doing more of the things the government does, just for more people for the overall benefit of all. Any policy that does this, though, tends to come at a cost to the people most able to contribute—the wealthy—while benefiting the masses who are less wealthy, which is wealth redistribution.

There are many more aspects to explore, such as the varying degrees of capitalism vs. socialism, tax deductions, refundable tax credits, donor states, safety net programs, and the carried-interest loophole. However, this explanation should provide a clear understanding of the basics of wealth redistribution and why the government takes from the rich and gives to the poor.

Keyword: Taxes, Wealth Redistribution, Government Assistance