Read this book. It's very enlightening...
"Most statistics on income inequality are very misleading in yet another way. These statistics almost invariably leave out money received as transfers from the government in various programs for low-income people which provide benefits of substantial value for which the recipients pay nothing."
According to Sowell the bottom 20 percent of income recipients receive more than two thirds of their income from such transfer payments... such as subsidized housing etc..
"In 2001, for example, cash and in-kind transfers together accounted for 77.8 percent of the economic resources of people in the bottom 20 percent. In other words, the alarming statistics on their incomes so often cited in the media and by politicians count only 22 percent of the actual economic resources at their disposal."
Why does government so encourage the increase in transfer payments to the bottom 20 percent? One reason I can see is that government workers rarely create any real value in the the economy and so many are paid in a portion of these transfer payments to the poor. If there is a new government program to provide say car seats to the poor by income, there must be scads of people employed to manage this program. Incomes must be checked and car seats must be purchased and distributed.
A second reason is that more and more the electorate will vote for the person or persons who can promise the most in programs and fixes that take from the "rich" and redistribute to the "poor". This has become the easy way to power for politicians in both major parties.
Anyway, this book is very enlightening.. I hope you'll get it and read on...
Visit Thomas Sowell's site here... and you really ought to read this blurb about him here..