Redistributing wealth just means that the money taken and given to others can't be used to invest back into the economy in an efficient manner. This is known as The Broken Window fallacy.
In actual real life lower income people put most of their earnings back into distribution because they mainly use it for the necessities of food, cost of living etc. which actually invigorates the local economy.
Here's an overview of the myths about welfare from the Columbia University website, a review of Wealth and Welfare States: Is America a Laggard or Leader? by Irv Garfinkel, Lee Rainwater, and Timothy Smeeding.
http://www.columbia.edu/cu/ssw/faculty/profiles/Garfinkel-book.pdf
"Myth: The welfare state undermines productivity, efficiency, and economic growth.
Fact: Welfare state programs complement capitalism and increase productivity, efficiency, and economic growth. Investment in public education is the main driver of this; education is so demonstrably productive that including education in any analysis of social welfare shows that, in general, welfare state programs enhance rather than retard productivity, efficiency, and growth in economic well-being.
Myth: The welfare state is the antithesis of a capitalist nation—and thus wealthy nations are, by definition, NOT welfare states.
Fact: All wealthy nations, including the United States, are welfare states—that is, they are primarily capitalist states with large, selective doses of socialism. Capitalist governments socialize select institutions to reduce the economic insecurity produced by a market economy. The most common areas of targeting include education, public health, and some forms of insurance. While such policies require resources, rich nations have figured that the benefits exceed costs.
Myth: The United States pays far less than other rich countries for health insurance.
Fact: Including the costs of employer-provided health insurance makes clear that the United States pays far more than any other rich countries for less universal health insurance.
Myth: In the U.S., most welfare state benefits go to the poor and near-poor.
Fact: The way that benefits for families with children are distributed in the United States is U-shaped, wherein the poorest and richest get the largest benefits, and the working poor, lower middle class, and even the middle class fall between the cracks. Health care and housing are the most perversely distributed because in them, the U.S has separate programs for aiding different income groups—with the poor receiving means-tested benefits from safety net programs and the middle and upper classes receiving employer provided and/or tax related benefits. The richest fifth of the population gets health benefits that are almost twice that of the poorest fifth. The richest fifth receives housing subsidies (through the mortgage interest tax deduction) that are nearly four times the housing assistance provided to the poorest fifth and about eight times the assistance provided to the lower middle and the middle class."
