Income redistribution

There are a number of ways that the government redistributes income and the one most talked about is income tax because it is progressive, that is, as you earn more you move into a higher bracket. There are other ways where the system is regressive. Low income people are hurt most by these ways which include gas tax, sales tax, alcohol tax, tobacco tax, soft drink tax and many hidden taxes the most prominent of which is excise tax. Federal excise tax revenues—collected mostly from sales of motor fuel, airline tickets, tobacco, alcohol, and health-related goods and services—totaled $83.8 billion in 2017, or 2.5 percent of federal tax receipts. Some of the more recent taxes are pot tax and in California a proposal to tax drinking water. All of these taxes contribute to the growing disparities in income. The 5th edition of ITEP’s Who Pays finds that middle- and low-income people in all 50 states pay substantially more of their income in state and local taxes than wealthy individuals and families. The government takes money from these people and gives it back in the form of benefits which curries favor and hopefully leads to votes. This process has been spiraling up over the past 50 years and will probably continue. The question is would these people be better off if there were no tax and no public assistance and they got to determine how to spend their income. The government officials feel that these people would spend their money irresponsibly and still need help.