As you know, 529 plans avoid taxes for a select group, i.e., for those saving for their children's education. Government 'distributing' or 'controlling' how goods or services are used or not used is a tenant socialism. I agree that 529s may be a stretch but the fact is that government is controlling/distributing a service (education) when it benefits 529 savers over conventional non-529 savers.
The point I was trying to make is that our system is not purely capitalistic. We have many social programs. The question we are facing is whether: we will continue paying/supporting current social programs; eliminate some or all of them; or create even more social programs?
I will agree with you that our tax system favors some, over others. We offer tax deductions frequently, in order to encourage certain behaviors. Tax deductions reduce the amount of tax that an individual may pay the government, in trade for doing some behavior. In the case of a 529 plan sponsored by a certain state, we reduce our state taxes, up to a certain amount of income.
The federal and state governments also offer tax credits. These are direct payments or rebates, also given for certain behaviors, or being in certain classes. Tax credits are typically seen in "wealth redistribution" schemes, and are more akin to some of the welfare programs that you listed.
The point I'm making is that 529 plans are nothing like a welfare program. If you want to get picky about it, home owners claiming mortgage interest write-offs, deductions for dependents, and even a personal deduction is considered "socialistic," by your definition.