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A Rational Advocate
"The most formidable weapon against errors of any kind is reason"
 

How Socialism Works
By Ben Cerruti

There are those in the USA that are attracted to the idea that government should be utilized to equalize the wealth and income of a society. In their eyes the governing class could altruistically act in determining that which should be taken from those determined to be the haves and distributed to those determined to be the have-nots. The governing class is evidently presumed to have morals and ethics beyond reproach and not influenced by their own parochial interests. Of course, such an Utopia would only be possible if human beings were perfect and so similar as to be robotic.

In actuality, we find when those human beings in government are given the authority to redistribute wealth and income they never neglect to serve their own parochial interests in the process. They insure themselves a comfortable income and other benefits including generous pensions, health care along with the perks that go with their elected or appointed office. Given the power to allocate tax revenue for purpose of redistribution they routinely use it in a manner to gain from recipients something in return.

For those who are considered the haves by virtue of their wealth and income, depending on the degree, they look for ways to protect the wealth that they hold and to limit the taxation on their income. Income can be derived from invested wealth so minimizing the tax levied on it would be a major consideration. Using wealth to invest in businesses that create income that will be confiscated by way of taxation deters from that utilization. Accordingly, without that incentive wealth is left to derive income from investments elsewhere such as from securities or from areas provided by the imperfect utopian desired government to serve its members interests and perpetual existence.

The coincidental need for those with great wealth to protect it and for government to utilize it to maintain its power, a marriage is created that is anti-ethical to the very tenets of socialism. State Capitalism develops creating a governing power combining government and entities of great wealth

that includes individuals and large corporations. With the major holders of wealth as members of the governing class, the fallacy of the redistribution of wealth becomes apparent so that the only means left for redistribution is taxation of income.

Those with great wealth are obviously interested in conserving and using their wealth as they so desire. Many have tax free charitable foundations whose board of directors may include them, their family, friends and associates who receive stipends in return. Expenses for travel and the like related to the objectives of the foundations are also covered. The Bill & Melinda Gates and William Jefferson Clinton foundations are examples. These foundations do what may be considered meritable charitable work but they also serve as a separate tax-free shell. Once ensconced in their personal economic bubble they are freed from the shackles of government that existed prior to the liberation provided by the laws governing charitable foundations. Who cares then about paying those piddly income taxes when compared to their greater protected wealth.

What is then left for the rest in the private sector who are entities of lesser wealth and who support the public sector with the tax revenue derived from them. With the dis-incentives of socialism what happens to those businesses that are not part of the Statist ruling class. They may be large, medium sized or small and provide most of the jobs and the profits on which taxes are paid. When taxes diminish their net profit there is less left to grow their businesses. The incentive to hire people is to be able to utilize them to make a profit. Take the profit away and there is no incentive. It is that simple.

In the United States those that are employed, although many do not pay income taxes they still pay the FICA tax both directly and indirectly since the employer pays an equivalent amount. There is no way that federal entitlement programs can be funded without the revenue derived from this tax. Whatever name one would want to use it is still a tax even though it is not as apparent to the payer since it is withheld monthly, it must surely still be considered an amount that could be paid as salary to the employee.

So consider this when analyzing what is presently happening in our country. When socialism is implemented are its tenets of equalizing wealth and income able to be realized? Of course, they are not because of the nature of human beings. Simply said, when you try to make the have-nots the haves, the haves become the have-nots.

 
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