The Truth About Wealth Re-Distribution


A recurring theme throughout this campaign season has been the distribution of the nation’s wealth, stirred by President Obama and the Occupy movement.  A new phrase has entered the American political lexicon:  the 99 percent versus 1 percent.

Mitt Romney stirred up the political waters recently with remarks about wealth distribution and government dependency.

“There are 47% of the people who will vote for the president no matter what,” he told supporters at a private fundraiser.  “All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.  [They believe] that’s an entitlement.  And the government should give it to them.  And they will vote for this president no matter what.”

Though what he spoke was truth, the Mainstream Media went wild.  At the same time, a 1998 tape was released of then-state senator Obama speaking in favor of re-distributing wealth.  Yet the media just yawned.

According to Newsbusters, the Big Three networks, in their morning and evening daily news coverage over a three-day period, aired 42 stories, covering an hour and a half, on Romney’s remarks.  Yet the same networks only devoted 8 stories and just 6 and half minutes to Obama’s remarks.  Nothing surprising here.

But what is the truth about the re-distribution of wealth?  In their speeches and campaign ads, Republicans act as though wealth re-distribution is some foreign concept that Obama wants to impose on the United States.  It is the result of foreign influence, no doubt, but the idea has been around for a long time.

As a starting point, some might argue for Lyndon Johnson’s Great Society, which gave us the modern-day welfare state; others for FDR’s New Deal, when the government stepped in during the Great Depression to provide jobs for the unemployed.

In fact, FDR attacked the rich and sought a 100 percent tax rate on the wealthiest Americans, which he imposed by executive order.  Congress, a bit more benevolent than he, passed a bill to lower the rate to just 90 percent.  No wonder the economy did not grow and could not produce private sector jobs.

But the truth is the concept has been around for more than 100 years, first emerging in the 1890s.  In 1894 Congress addressed the concerns of the distribution of wealth and passed the first peacetime income tax in American history.  It established a two percent tax rate on all incomes of $4,000 or more, exempting 99 percent of the population.

Proponents argued that the nation’s wealth was concentrated in only a few hands. “The tax proposed on incomes,” wrote Congressman Roger Q. Mills in its defense, “is but a light touch on the monumental piles of wealth, for the protection of which the government is standing guard.”

One economist argued that just 70 persons owned a combined wealth of $2.7 billion.  Some 50,000 families owned half the nation’s wealth, while four-fifths of the people earned less than $500 a year.  The tax burden was disproportionally placed upon the poor, who paid taxes equivalent to 75 to 80 percent of their savings while corporations and the wealthy paid only 8 to 10 percent.  Federal taxes had increased six fold since the Civil War while untaxed corporations saw their profits soar tenfold.

Sound familiar?  This was essentially the same argument made by the Occupy crowd.  However, in those days, the US Supreme Court actually watched out for the Constitution and struck down the income tax as unconstitutional in 1895.

In a harsh concurring opinion, Justice Stephen J. Field prophesied about the future days of class warfare.  He saw the real danger in such a tax designed to re-distribute wealth.  “The present assault on capital is but the beginning,” he wrote.  “It will be but the stepping-stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich; a war constantly growing in intensity and bitterness.”

Justice Field was right.  Our political contests have grown into a bitter war of the rich against the poor, and many Americans have seemingly forgotten our Judeo-Christian heritage, in which we are taught not to covet.

The Tenth Commandment forbids it:  “You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.”  This also would include thy neighbor’s checking account.  But I guess Barack Obama learned things a bit differently in Jeremiah Wright’s church.

Many argue that very little would change if Romney defeats Obama this November, and that may be true in many respects, but one thing would change for the better: we would have a president who does not attack success and reward failure.  We’ve done that for far too long and it must come to an end.

This column was published in the Laurel Leader Call (Laurel, MS) on Tuesday, October 2, 2012.

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