Government Redistributed $2 Trillion From Upper Income Classes To Poorest In 2012


A new report from The Tax Foundation shows that the Federal government redistributed more than $2 trillion in income from the Nation’s highest earners in 2012 to the bottom 60 percent of income earners.

The extensive study, released Nov. 8, reveals that low-income Americans receive $5.28 in government spending for every dollar they pay in taxes, while high-income families receive $.25 for every dollar they pay. The shrinking middle class shows signs of sliding toward the lower-income bracket, with middle-class income earners receiving $1.48 back for every tax dollar they pay to the government.

The study targets the effectiveness of government schemes, taken as a whole, to shore up the needs of lower-income Americans by seizing and reallocating the wealth earned by top earners.

“While the distribution of the tax burden is a frequent topic of debate — especially in Washington, D.C. — there is little attention given to the distribution of spending programs,” the authors explain. “And rarely has there been any attempt to analyze the totality of tax and spending programs across all levels of government. This study seeks to fill this void by analyzing the distribution of both taxes and government spending at both the federal and state and local levels.”

Here are more of the report’s key findings:

  • As a group, the bottom 60 percent of American families receive more back in total government spending than they pay in total taxes.
  • Government tax and spending policies combine to redistribute more than $2 trillion from the top 40 percent of families to the bottom 60 percent.
  • The total amount of redistribution has increased slightly over the past 12 years. Middle-income and working lower-income families were the biggest beneficiaries.
  • Lawmakers can remove equity as an issue in tax reform by matching any loss in progressivity on the tax side with an equal increase in progressivity on the spending side.

As noted above, there’s an increasing tendency on the part of government to include more middle-class Americans in the entitlement culture – a tendency The Tax Foundation says is deleterious to the Nation’s economic backbone.

“Interestingly, we find that the biggest net beneficiaries of this increase in redistribution from 2000-2012 are middle-income families and working lower-income families (those in the second quintile). These were the families most targeted by economic stimulus programs and more generous tax credits,” the authors note.

“…These findings have particular relevance to the current tax reform debate because distributional issues are one of the key sticking points to reform proposals that would cut marginal tax rates while broadening the tax base. But tax progressivity is only half the picture, because progressivity can be achieved through both taxes and spending. Thus, if moving to a flatter, more economically neutral tax code reduces progressivity in the tax code, overall progressivity of the fiscal system can be maintained with slight adjustments to federal spending.”

In other words, a flat tax would be more equitable for all Americans, regardless of their income, and would negate much of the tax inequity that serves as pretense for the government to its base of financially-dependent citizens.

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • antiliberal00

    The flat, equal tax will never fly. The democrats/socialists use the progressive tax system to buy votes, keep themselves in office and enslave the low information voters..
    A flat tax would take most of their voting base away from them.

    • doktor don

      Not sure it would take their voting base away. What it would likely do; is destroy any & all, programs for the Good of the Nation. Just another way for the Rich to Starve the Beast; and, further enrich themselves.


    Will America become the next South Africa?

  • Warrior

    As long as the fed keeps printing away, everyone gets something. Marvelous!

    • FreedomTrainUSA

      Eventually at this rate the Dollar will be worth less than the Meican Peso…and will not be worth as much as the paper it is printed on…

    • doktor don

      Gees, if only that were true! A recent study has concluded that the benefits of the, “Q’s’ have all gone to the Top 10%, of the Income/Wealth Scale. They have been receiving double digit increases during the past five years; while the remaining 90%, are spiraling down. Family Income is now very close to 1915 Levels. Further, Pat Buchanan has said recently; that, the working stuffs of this Country that make it all go, day-after-day; haven’t had a real wage increase in 40 years; after adjusting for inflation. Financial Engineering of the Monetary System has destroyed Capitalism & the Free Market System. The past two GOP appointees – – you know – – the Maestros who got their start on Wall Street; ushered in the new Era of Bubble Economics; which, for the past 18 years has been all based on debt; and the Anti-Capitalist practice of Over-leveraging and Gambling. You can blow those speculative bubbles pretty big when one has control of the Money Supply, Printing Presses; and, the Killer of them all: Interest Rates! The Anti-Capitalist practice of setting artificially low rates; stimulated huge risk-taking and, outright gambling, like this Country has never seen! Main Street is Broke; the Middle Class is on a fast track to the Poor House; College Graduates are sitting home with no job; and a mountain of Student Loan Debt; and Retirees have had their nest eggs wiped out by The Geniuses on Wall Street; who concocted, what Buffet has called, “Financial Weapons of Mass Destruction.” Further, the Government is clearly Bankrupt; real job growth is nil, and revenues are flat. Yet, the price of everything seems to be rising. It is called Stagflation friends; and Japan knows all about that. They have been mired it for over 20 years now. No jobs; and little or no growth in their GDP.

      • doktor don

        Oops, that would be, 1995 levels above; not, 1915. Sorry about that!

  • Jim B

    Feed a man a fish and he becomes your responsibility forever! Teach a man to fish and he becomes free to stand on his own two feet!

    • Robbie

      But if you don’t feed a hungry man and give him a fishing rod next to a pond with no fish you are going to have not only a hungry man but an angry one at that. And even if he has a low paying job and you refuse to give him even a 25 cent minimum wage increased he’ll really be upset.

      • J_in_TX

        Give me, give me, give me. How about the man learns to make a fishing pole and dig a few worms for bait. Then he would be self-sufficient instead of depending on someone to give everything to him. Remember Robbie, if you aren’t part of the solution, you are part of the problem.

        • Robbie

          No point in making a fishing rod if the big guy on the hill has already taken all the fish. You can make as many fishing rods and dig up as many worms as you want but if there’s no fish in the pond it all comes to naught. Leave a few fish in the pond for heaven’s sake so that the hungry man can get a bit to eat. That would be helping to be part of the solution. Otherwise you’re just a big talker with a cute quotation.

        • doktor don

          J, I sincerely wish you had a clue. Yes, we have some generational welfare problems; that have been allowed to go on for far too long. Yet, those tough issues could be addressed; if only someone in Congress was willing to tackle the problem. With that said; one cannot just take everything away from the Poor, and Unemployed; without offering a solution. Many are un-employable; they simply do not have the skills or education/training needed to do an acceptable job, at anything! I am in a position to know this first hand. So many people; and I will try to be kind; are pathetically disconnected from all Social, Economic, and Political Institutions. They are hardly even able to function in Society. This Cycle of Despair and Dependency most be broken; but it won’t happen by throwing these people and their children, under the bus; nor, by ignoring the problem; and, just continue throwing money it.
          Now, to the larger issue! Corporate America – – especially the Financial Sector of our Economy has all the advantages that privilege bestows. Yet, they are robbing Taxpayers Blind. They are the Socialists; they receive more handouts and sop up more Socialistic money and benefits at the Gov’t’s Trough; than anyone on the Planet. Trillions & Trillions – – my friend. I have mentioned TARP & Yearly Corporate Welfare Subsidies above; so let me touch on another act of Political Largess: Are you aware that the Bush Tax Cut for the Rich back in 2002; amounted to a LOSS of
          Revenue exceeding $5 Trillion Dollars over a 10 year period? Or, the fact that Corporates received a total of another Trillion between 2000 – 2010, in Subsidies; and, Bush didn’t get Job One – – from any of these Gift Horses. In fact, there have been NO NET, NEW BREADWINNER JOBS for the past 13 years – – dating back to the Clinton Era. Further; in terms of Responsibility; how – – in good conscience – – could the GOP (Bush Family), start three wars; and, not pay for a one of them?! The cost of those wars were just added to the Nation’s Debt; and, today, we are in deep, deep trouble. There is so much more that should be said – – and, needs to be said; but time & space limit here.

      • doktor don

        Robbie, you are much more polite & kind than I would be in a response. So many people do not have the tools to take a more global view of what is happening to Capitalism & the Free Market System. The Puppet Masters drill down to the smallest of grievances; then conspire to play the two side against each other. It is so apparent in issue after issue. Many of the people who post here are likely, rednecks; and not wealthy – – in my opinion; yet, they sop up the propaganda; and pile on the poor, the working poor; and, the fast – diminishing – – middle class. No civility – – no compassion – – no sense of community; or, anything for the common good! This isn’t the Country that was passed on to the Baby Boomer Generation. For the most part; they have destroyed much of the future for our grand children; and, for several generations to come.

        • Robbie

          Thank you.

      • dogbert69

        ever hear about gardens?

  • FreedomTrainUSA

    That is what the “Little Boy Dictator” stated that he was going to do….but the BOTS….did not listen because they are the ones on the recieving end of ALL THE FREEBIES……What happens when the Gravy Train of Freebies runs out…..For a Preview……LOOK AT THE RECENT HISTORY OF GREECE…..

    • BlueAlert

      Are you aware that corporate welfare and tax loopholes cost taxpayers 10 times as much money as traditional social welfare?
      BTW haven’t heard much from Greece lately as things are going much better there.

  • Robbie

    Don’t trouble yourself over this. Fact is that the uber rich are getting richer and the 98% below them are staying in place if they’re lucky or getting poorer.

  • BlueAlert

    So the growing income inequality that was started by the Reagan tax cuts has come home to roost. The uber rich have cornered so much of the wealth in this country and there is so little left for the lower 90 percent that government spending has had to move in to keep the lower income people from starving.

  • MIKE6080

    I never received a penny from the government and never will take any