Yes, it's a stopgap. Just like every other form of government, ever. Consider the alternative. Cut off the money supply to the have-nots. Then you have a violent, nationwide revolution where tremendous amounts of capital are destroyed. The end result being, that NOBODY has anything. So keeping the poor happy is a very utilitarian goal, not a pinko dream.
Who else should have that power and control? Those poor masses can't even help themselves, so they certainly shouldn't have control.
I'm not saying it's good or bad, it's just the reality.
Once the system is entrenched in society and people are used to it, taking it away would just cause chaos and a crime-wave. I'm aware of that.
With regards to your second point:
I don't believe in absolutes, but generally the balance should sway towards less
central government control in society. More regional and
local power as opposed to that of the state.
The problem is that once you introduce these socialist concepts, people become dependent on them and then the system is basically stuck there.
There's no such thing as 'free' housing etc....someone is always paying for it. Actually, it's mostly the working classes who are paying for it. Proportionately, the wealthy pay less tax...as in a third of their pay-check is going to hurt them far less than a third of a labourers.
Plus there's still VAT and all kinds of other taxes
besides income tax.
All this lead to increased prices of everything and higher inflation. Who
pays for the taxes on fuel.....? The people buying the delivered products in stores because of increased transport costs.