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The Redistribution of Wealth to the Rich

The following is about the redistribution from the poor and middle class to the wealthy. There are at least a hundred ways this is accomplished, but just a dozen or so of the more important ways will be covered here. What lead me to do this research was the controversy of the 2008 presidential campaign after Obama made the political mistake of advocating "spreading the wealth around."

Of course, saying that seemed shocking to some, but what false outrage! Virtually all Republicans and Democrats alike believe in certain social programs that "spread the wealth." I didn't hear any of them advocating the dismantling of welfare, Medicaid or public education. These certainly help poorer people at the expense of the wealthier who pay most of our taxes.

It was called "socialism" when Obama advocated the same thing most Republicans believe in. Why? Because he advocated a bit more wealth be redistributed? That's not a principled argument. By the way, in 2000, complaining about the Bush tax cuts, McCain said "When you reach a certain level of comfort, there's nothing wrong with paying a little more."

My Own Perspective

I don't much care for labels, but my economic beliefs are closer to a capitalist philosophy than any other. I would prefer less redistribution of wealth (at least through government force), but I also understand why the public thinks there is something wrong with capitalism and free markets. What we have is neither, but if we are to call it capitalism, then I suppose I'm against capitalism as well.

The way things are currently arranged, those who are very wealthy are provided with many legal ways to take from the poor and middle class to enrich themselves further. That isn't fair, to say the least. It is also ultimately destabilizing for a society. If people ever fully understand the many "reverse Robin Hood" scams out there, the wealthy here will eventually all have to live behind guarded walls like they do in much of the rest of the world.

Here are some of the ways the rich get richer unfairly. You can click through the links to read more on each of these.

Corporate Welfare - Redistribution From Poor to Rich - At least 100 billion dollars is taken from all of us taxpayers and handed over to corporations in this country every year. Much of that is then handed out in bonuses to wealthy managers of these companies.

How the Rich Get Richer - This post on the New Ideas Blog is about a scam that Warren Buffet pointed out at least seven years ago (and nothing has been done about it). It's a legal way for corporations to raid the pension funds of employees and put the money in the pockets of their wealthiest managers.

Spread the Wealth? - While calling Obama a "redistributionist," John McCain suddenly announces during a debate that he wants to spend $300 billion to buy bad mortgages and reduce the principle. Those of us who responsibly bought homes we can afford (ours was $65,000) get to have our money redistributed to those with $300,000 homes?

A Bailout for the Rich - The "bailout" begins. $10 billion to Morgan Stanley - they hand out $6.44 billion in bonuses. Goldman Sachs gets $10 billion and pays out $6.85 billion in bonuses. I'm not making this up. That $700 billion constitutes a huge transfer of taxpayer money to some of the wealthiest Americans.

Tax Loopholes for the Rich - There was a time when I argued that loopholes only allowed the wealthy to keep more of what is their's to begin with. But what if they paid nothing (or too little) while benefiting from government services paid for by others? Isn't that an upward redistribution?

Millionaire Welfare Farmers - Why should minimum wage workers have their money taken to give more money to millionaire farmers? They shouldn't, but that's what is going on. The poor that get hurt the worst don't live in this country though.

Some Corporate Welfare Examples - I hate to focus on the negative, but it's difficult to understand the magnitude of the transfer of wealth from poor and middle class to the wealthy if we don't look at a few examples of it. You'll find five more examples here.

Corporate Welfare - A Definition - My definition and a few examples of indirect subsidies.

The Working Poor Do Pay Taxes - Contrary to the claims of some conservatives that 40% of Americans pay no taxes, most pay far more than is realized. A guy flipping burgers may even be paying a higher percentage of income in taxes than Warren Buffet, as you will see.

Social Security Rip Off - Recent studies showed that some retirees need social security to avoid poverty - 12% of them. The other 88% simply get to improve their lifestyle at the expense of working folk who support this Ponzei scheme. In fact, about $100 billion annually goes to retirees who make more than the average household income - a huge transfer of wealth from young to old and sometimes from the poor to the wealthy.

The Poor Side of Town - Living in a mobile home for years, I watched as the process unfolded. The poor are regulated out of town - another way the poor are taken advantage to make people wealthier.

Preying on Poor Countries - Imagine a scheme to make rich bankers richer while making some of the poorest people of the world poorer, and all at U.S. taxpayer expense. You don't have to imagine it - it has been around for a while.

Property Tax Rates Are Higher for the Poor - Unknown to the average person, it is renters who actually pay the property taxes on the homes they rent. And these properties are taxed much more heavily than others.

Federal Reserve Fraud - How do you take billions from the people without them knowing? Print money to loan to their government at interest. This is one of the biggest rip-offs you'll ever read about.

Get Rid of Corporate Taxes - See who really pays these taxes, and what should be done instead.

The Rich Get Richer With Government Help - This page tallies up the damage done - far more goes to the rich than the total of all welfare aimed at the poor.

Poor People - How to Push Them Away - Banning ugliness in our communities.

Now to clarify some things:

1. The primary way the rich get richer is by providing things that benefit society. In other words, they create value. We are not forced to buy Bill Gates products, but we do so because of the great value they have to us. The wealthy do not primarily look for a bigger piece of the pie - they make more pies.

2. There's nothing wrong with being wealthy, but how you get there matters. In a fair and free society getting rich does not cause anyone's impoverishment. Historically, we have all benefited from an economy that rewards those who create the most value.

3. The danger of great wealth is that it buys great power, which can be used to take advantage of the poor and middle class. This is what has been happening more and more in recent years. Laws and regulations have been lobbied for and passed which allow the redistribution of wealth from the poor and middle class to the wealthy.

4. Some will rightly point out that the wealthy pay most of the taxes that support our government and all of its programs, but this does not make laws written for the rich more just. Also, some of the ways wealth is moved from poor to rich are not visible in the tax code, nor easily measurable - and all are unfair in any case.

5. Life takes precedence over other values, so if some redistribution to the poor is needed, it is entirely justified (who would honestly allow a child to starve next to a rich man's banquet?).

6. Even if some us prefer that the redistribution of wealth be kept to the minimum necessary, it is clear that the lesser of evils for a society is a transfer from rich to poor rather than the other way around.4.

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Redistribution of Wealth