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Redistribution of income

By Ben Cerruti
web posted July 26, 2010

We have been witnesses to a continuing use of class warfare by those in government, abetted by the media and an assortment of special interest groups and individuals. In this essay we will consider the methods they use to establish the terms relating to redistribution of income.  

Utilizing effective divisive tactics they initially obfuscate their intentions by using the term "wealth" in place of "income" when proposing material changes in the income tax code. Taxing income derived from accumulated wealth does not alter that wealth. They next establish three main category of classes; rich, middle class and poor. If one were to pay close attention, he or she would find that they rather conveniently alter the dividing lines to suit the subject for which they are advocates.

It should be apparent that attempting to establish classes by simplistic definition is ludicrous. Is a person earning $1,000,000 a year in his twenties as rich as one earning the same amount in his or her sixties? The person in their sixties may have had to spend many years working up from under six figure annual income to reach this income level and the person in their twenties may find that in later years his or her income may fall to sub six figure level. A poor person at a young age may become affluent with time and an affluent person may suffer financial reverses that will throw him or her into what is presently considered the poor class.

There are many other factors, such as age, education, marital status, number of dependents, physical capability, race, national prosperity, war or national emergency, that affects the financial status of any person at any given time during their lifetime.

It should be apparent the because of these factors, which for want of a better name we can call dynamic natural demographics, any fair and effective redistribution of income is impossible. The fact is that the use of class to define favors or penalties those in government may dispense is divisive and counter productive. It pits citizen against citizen and serves to only benefit those in government utilizing these tactics.

It would rationally appear more productive for government if their actions would be directed towards supporting the movement of those at the lower end of the income scale, at any given time, up into higher levels of income. How obvious it should be that this result can be effected by more reliance on the overall growth of our national private sector wealth, wherein there is then more to share for every citizen; this rather than limiting growth by draining excessive wealth from the private sector that is then used in non-productive fashions.

Those in government that control these actions that interfere with the manufacturing of private sector wealth, that benefit all in the private sector, do so in the guise of "fairness". The disingenuous use of this word is more clearly understood when one understands that in this process a substantial portion of the private sector wealth taken by those in government is dispensed to those respective special interests to which favors are owed. This very fact should also dispel that mistaken feeling by some that Government can create private sector wealth better than the private sector itself.

The obvious sometimes has to be explained. It is rather difficult to understand why people whom one would believe are well educated, especially those in the media, would not understand some of the following truths. People who accumulate excess income, unless they bury it or put it under their mattress, must place it back in circulation. They do this either by putting it in the bank, purchasing assets such as real estate, stocks and bonds, or by investing in assets and personnel for their own business. Just the fact that the excess income is in circulation allows for its use by the rest of the private sector to promote increased business, create jobs and overall increased financial wealth.

If this excess income is confiscated through taxes it is not allowed to work to effect this increased private sector prosperity. Again, to explain the obvious, this counter productive action by those in government is only taken to benefit their own personal position and agenda since, in factual truth, it does not provide the beneficial advantage that it professes to those in the private sector. It is necessary to understand that the government bureaucracy does not produce any revenue, it is supported solely by the taxes it collects. It is by its nature inefficient and self serving since those employed in it benefit personally in income and career longevity by its existence and growth.

I hope there are those who read these words who still have hope and faith that there are among us leaders, new or old, that will arise to condemn the use of class warfare by those in government, and in the political arena, to serve their own rather than the interests of the citizens of this country which they disingenuously portray they do. ESR

This is Ben Cerruti's first contribution to Enter Stage Right. © 2010 Ben Cerruti


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