Most Taxation Is Income Redistribution

Jason Y writes:

Redistributing income among people who would waste the money is foolish. It’s like giving investment money to people who know nothing of business, they would get ripped off by every scam known to man.

Yes but almost every government on Earth does this, even ours. All  taxation is redistribution as a good general rule as long as it is not regressive. All progressive taxation is surely redistributive and even a flat tax may be redistributive. All means tested social programs are redistribute. Everything socialist or even social liberal is redistributive.

So redistribution of income is general across most of the world now because most nations are run by more or less socialist parties. And most redistribution simply ends up giving low income earners more money to spend. They may indeed blow it, but so what? Poor people spend every nickel in their pocket, and all of that money goes right back into the local economy. It’s the rich that do not spend all their money.

1 Comment

Filed under Economics, Government, Liberalism, Political Science, Politics, Socialism

One response to “Most Taxation Is Income Redistribution

  1. Ed

    The purpose of taxation is to fund the government, which historically has meant mostly armies and armaments. The idea has always been to use the taxes that will raise the most money.

    There is a tension with deciding whether to tax the peasants or the nobles. The advantage of taxing the nobles is that they hold most of the wealth, and if you tax the peasants too much you run into the problem of trying to squeeze blood from a stone. Plus if the nobles accumulate too much wealth they become threats to the king or at least impossible to control. But the nobles are powerful enough to avoid taxes or to even overthrow the king if taxed too much. Its easier to tax the peasants.

    Where there is a middle class, taxing them is ideal because they have some wealth and no power. So the rule, including today, has always been to hit the middle class heaviest with taxes. Unfortunately any progress really depends on having a strong middle class, and middle class people have proven to be much more loyal and capable servants of the crown than either the peasants or the nobility.

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