"24/7 Wall St. examined government spending by state in a number of categories to identify those that give the most and least in money and benefits to their residents. Our analysis has found that states that provide the most services and benefits have high income inequality. In order to finance these programs, the states that offer the most to their residents also have among the highest tax burdens in the country."
Interesting that the states that redistribute the most wealth have the most inequality in income. The states which redistribute the least wealth also have the narrowest inequality in income.
"Income inequality measures how evenly wealth is distributed among residents of an area. Income inequality is high when a few people make a great deal and many make far less. Six of the ten states that are most generous are in the top 15 states for highest rates of income inequality. The three states with the greatest inequality in the country — New York, Connecticut, and
Massachusetts — are among the most generous. Many of the states giving the least, such as Idaho and Indiana, fall on the other end of the spectrum for income inequality.
But the question must be asked how does the money get redistributed? That seems to be the main function of the Federal Income Tax, after all when the income tax was instituted they could have gone with a federal sales tax. Both required a constitutional ammendment so why do income instead of sales? With an sales tax the individual has the option to pay the tax or not, depending on whether or not they purchase a particular item that is taxed or not. However, with the income tax the federal government has control of whether or not the tax is paid, and by deterimining the tax rates and deductions they can use the tax code to redistribute wealth. Again 24/7 Wall Street shows this...
"The Tax Foundation calculates each state's tax burden by taking the total amount paid by the state's residents in taxes, and dividing it by the total income of the state's residents. Eight of the ten states that are most generous (in redistributing the wealth)
are among the top fifteen states with the highest tax burdens. New York, New Jersey, and Connecticut are all included on the list and also fill the top three slots for largest tax burdens in the country."
Could it be that using the tax code to redistribute wealth actually increases this inequality in income, or wealth? After all most wealthy do not actually get their compensation though just income as some one who earns a paycheck does. Compensation can take many forms, such as stock options, dividends, profit from sales, etc. Could it be that punitive tax rates on the highest income earners just encourage them to change their method of compensation? A quick review of recent tax inreases show that when tax rates go up revenue to the government decreases and conversly when tax rates decrease revenue rises.
I would suggest that redistribution of wealth via the federal tax code is detrimental both to government revenues and to the citizens it is intended to help. I would propose that our current tax system needs to be drastically reformed to a flat tax system, or replaced in favor of the Fair Tax, a national consumption, sales, tax.
Redistributionist claim fairness in their use of the tax code to redistribute wealth, but if the tax code were truly fair all income earners would pay the same tax rate regardless of income. That would truly match the definition of fairness. Redistributionist claim that the wealthy should pay higher tax rates because that would be fair. To make this true you have to believe that someone earning more than another person is an injustice. When a person accepts a job at a certain rate of pay they have negotiated a contract. If a different person contracts for a different rate for a similar job that is their contract. Both have been fairly contracted, therefore, fair. No injustice has occured.
In the cause of Liberty I would promote the Fair Tax, a national consumption tax. This allows the individual to control their tax amount they must pay the federal government. The authors of our constitution and founders of our country intended for Americans to have the EQUALITY OF OPPORTUNITY not the Equality of Outcome. Fairness as definned by Redistributionist and their concepts of Social Justice was not a part of our founding and can not be a fundamental foundation of Liberty.
Redistribution of Wealth, or Liberty and Equality of Opportunity? I choose Liberty and Equality of Opportunity.
All Quotes from 24/7 Wall Street as published by Huffington Post 11/11/11