The scope of redistribution is net tax or expenditure.

The scope of income redistribution in America is truly immense. In 2007, the last year not significantly affected by the Great Recession, the federal government spent about $1.45 trillion (roughly half of its total spending) on programs aimed at redistributing income from more wealthy Americans to the less wealthy. These ranged from means-tested entitlement programs like Medicaid, housing assistance, unemployment compensation, and food stamps to broader entitlements like Medicare and Social Security (which are not means-tested, but nonetheless transfer income on a mass scale and are generally justified on the grounds that they reduce poverty among the elderly).

Beyond these direct anti-poverty initiatives, the progressive federal income tax redistributes income even further. Progressive taxation means that the tax rate increases along with a taxpayer's income; a person earning $50,000 per year, for example, might pay $10,000 in taxes while a person earning $100,000 per year might pay $30,000. The higher-income person not only pays more taxes in total: He also pays a larger portion of his income (30% versus 20% in the preceding example). The wealthier give up a greater share of their earnings so that the less wealthy can forfeit a smaller portion of theirs; in this way, our progressive tax code is redistributive. The table below displays the effective tax rate (defined as total federal taxes paid — including payroll taxes to fund Social Security and Medicare — divided by total income earned) for different segments of the income distribution. It also shows the share of the nation's total federal tax burden shouldered by each income group.