The Redistributive State: How Government Shifts Economic Resources from High- to Low-Income Households

This week, the U.S. Census Bureau will release its annual report on income and income inequality. Historically, the official Census figures on inequality are misleading because they fail to account for most government fiscal redistribution. The high taxes paid by affluent households are ignored, and most of the government benefits and services received by lower-income households are not counted.

But government fiscal redistribution in the U.S. is extensive: the transfer of resources from higher- to lower-income groups is a major governmental activity. The left constantly complains about inequality, calling for higher taxes and increased government spending. But before calling for even more government redistribution, it is important, at least, to understand how much redistribution currently occurs. More...

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