The welfare state grows when envy convinces voters that governments can take from the rich and give to the poor, thus increasing the size of the state. Simple accounting exposes the fraud and explains why many poor folks don’t fully share the prosperity of modern societies. The key to understanding the scam of the welfare state is that large businesses regard the taxes that come with enlarging governments as just another cost that has to be passed on to their customers. They do not “absorb” these extortions; they pass them through. Businesses and the rich do not pay taxes; they collect them. Licensed and privileged entities (utilities, doctors, insurance companies, the local zoning, and pla ning commission) do something similar when they use the state to exclude or control competition, forming oligopolies that allow the licensed to charge above-market prices for their products. The poor earn what they can in jobs available at wages offered, and pay the taxes embedded in prices inflated by their compassionately bloated government.
