There are two main groups which benefit from State predation, and both take their ill-gotten goals from the wallets of the middle class.
The poor have always loved the State, because the income that it redistributes to them – though small in real terms – is close enough to the income that they could earn from their own labours that is far more pleasant than rough work. Pushing a broom costs money – bus fare, clothing, lunch, shaving etc. Looking for a job can cost even more. If you can only earn $15k a year, and welfare pays you $10k, and it costs you $3k to work, the difference between crappy work and relaxing leisure is only 2k. Go to any person and say: hey, if you stop working, it’ll cost you $2k a year in income. Rush hour would be no more. And when you take money from the State, you have lots of time to organize. You can go to rallies, march, write letters, whine and complain to your heart’s content. So the less money you have, the more incentive you have to lobby the State for income.
The rich want two things. They want to stay rich, and they want to stop other people from becoming rich. Thus they love high levels of income tax, and prefer lower capital gains taxes, combined with labyrinthine loopholes for business ownership, corporate profits and offshore investments. They like high levels of income tax because that prevents the middle class from accumulating enough capital to challenge the State control of the wealthy. They need loopholes, of course, because they don’t want to be paying the kinds of taxes the middle class do, and they have the money to pay accountants to figure out how to effectively evade high taxation. The rich also use the State to block market competition, so that their inefficient empires can thrive without innovation, risk or intelligent management. The rich have the time, language, contacts and wealth to very effectively sway the State. The State needs the rich for two reasons: first, it costs a lot of money to run for office, and second, because the rich usually control the means of communication, and can bamboozle the general population into missing the blindingly obvious. The rich do not rule the State – the State, being violent, cannot be ruled – but the State uses the rich to eliminate debate about its true nature.
The Middle Class
And who pays for all this? The middle classes who work hard, try to save, and have little time for political action. Since they are being stolen from by a thousand special interest groups, it does not pay to fight any single one of them – and it is impossible to fight all of them, because the power of the State bars the way. This is the most terrible aspect of centralized violence. It redistributes – and shrouds – material gains and losses in such an unbalanced manner that it encourages all the worst elements of human nature. The State creates temptations as terrible and hysterical as when free goods are in short supply. The panic, the rush, the lack of planning, the entitlement, and incivility produce the ugliest and brutal interactions. The power of the State has the same effect as throwing bags of rice into a starving refugee camp. Any situation where, in order for one person to win, another must lose, will immediately become a war between worse and worst.
Due to the power of the State, this has been the case throughout most of human history. Unlike the market economy, the State creates nothing, and so in order for one beneficiary to gain, another must lose. This creates a sick panic in society, where people either exist as numb drudges slaving under the shadow of the sword, or who claw and bite to grab the hilt. It is a window into the history of our species which should forever be barred from the future.