Poverty rate doesn’t take into account income redistribution

You need to get the facts straight, before you establish the policies. The government and political establishment like to perpetuate the myth of income inequality in America. Not counting all government transfer payments made by federal, state and local governments as income to the recipients of the transfer payments distorts income inequality in America.

In 2017, governments redistributed $2.8 trillion, 22% of the nation’s household income. Excluded from measurement of household income are government transfer payments like tax credits, food stamps, unemployment benefits, and Medicaid. You need to get the facts straight, before you establish the policies.

The government and political establishment like to perpetuate the myth of income inequality in America. Not counting all government transfer payments made by federal, state and local governments as income to the recipients of the transfer payments distorts income inequality in America. In 2017, governments redistributed $2.8 trillion, 22% of the nation’s household income. Excluded from measurement of household income are government transfer payments like tax credits, food stamps, unemployment benefits, and Medicaid.

The two government agencies reporting on household income, the Census Bureau and the Bureau of Labor Statistics, often contradict each other in their reporting.

In 2020, the census report on income and poverty showed that 3.3 million additional Americans had fallen into poverty. This was in a year when federal spending rose almost 50% (stimulus checks) and personal savings increased dramatically. The Census Bureau admitted if stimulus checks had been counted that household income would have risen by 4% instead of falling 2.9%, and the poverty rate would have fallen by 2.6%. The Census Bureau fails to account for two-thirds of transfer payments as income to those who receive them, while not subtracting taxes paid by higher income households. Americans pay $4.4 trillion a year in federal, state and local taxes. The Census Bureau does not reduce household income by the amount of taxes paid when it measures income inequality.

There are differing opinions about income inequality and redistribution of wealth in America. When considering the income gap between the bottom 20% of households to the top 20% is 4 to 1 rather than the 16.7-to 1-ratio in the official Census data, it is much harder to argue that income inequality in America is unfair.

— Larry Roche, Windsor