What can countries do to lower their income inequality?

Answer 1

First, they need to decide if they actually want to do something about income inequality or wealth inequality. While income inequality and wealth inequality sound similar, they are quite different beasts.

Some of the policies that aim at reduction of income inequality are progressive income tax, entitlements (including universal healthcare), and tax credits and exemptions for taxpayers in the lowest income bracket(s). Wealth inequality, conversely, is sometimes addressed through wealth taxes and inheritance taxes.

One "policy" that is not intended to do anything about inequality yet does is inflation; it tends to flatten the distribution of both income and wealth. Workers (especially unionized workers) routinely renegotiate their contracts to adjust their compensation for inflation; creditors never do.

Answer 2

Two very good previous answers, but here's the gist.

Communism doesn't work. Socialism in its current form doesn't work. Capitalism doesn't work. No form of current government works to making income equality.

Utopian theory was to do just that. Each person would be paid the same amount as everyone else, regardless of the job. The only drawback is there's little incentive to create, invent or strive for something better if you won't get paid to do so.

The income equality myth is a democrat's dream and a republican's nightmare. By taxing heavily the rich, there's no incentive to create, invent or build something great. By subsiding everyone else, there's no reason to excel at anything because the government is handing you free money.

So, aside from taxing and redistributing wealth, there's no alternative unless you're ready to live in 12th century Europe.

Answer 3

Instead of abandoning the progressive income tax, go back to it. (That is, the people with all the money should start paying their fair share of taxes.)

Stop giving tax money to the people who already have most of the money, as we do now.

Roll back all of the anti-union legislation. When we had strong unions, and many Americans were unionized, we had less income inequality.

Other than those things, I'm not sure. It seems to me that it's wrong for the very few who have all the money to be the only people to get more money, and that the people who actually do all the work don't make enough to live.

Beyond taxing the people with all the money and strengthening unions, I'm not sure what to do about it. Perhaps those would be enough.

Answer 4

That's a simple question. You just fix your income tax structure so that a guy that works 60 hrs/week doesn't make anymore than a guy that works 20 hrs/week.

Next thing you know, no one will work more than 20 hrs/week we'll all be broke. Then will everyone be happy.

The fastest and easiest way is just to take everything away from everyone. Put them all in re-education camps where they'll be taught to be happy for having nothing.

Does it really make sense to have no income inequity. I doesn't bother me that my doctor makes more per hour than the guy making my Italian sub. Should they both make the same per hour?

Answer 5

Back the USA. Then we hand out money like it's going out of style. Ofcourse we can always print more. Right?

Answer 6

The general prescriptions are tax the rich heavily on their incomes, on their expenditure and on their gifts and inheritance and transfer of property and on their estates, give subsidies to the poor, where possible remove private property titles and rights, restrict rich people from making further money, remove all incentives for people to become richer through use of their talents, skills and creative abilities. And, of course implement gradoise economic development projestcs to get employment to poor people and subsidy to poor farmers. The countries can do many things to lower income inequality, depending on why they want to lower the income inequality and the brains the elite ruling class of each country has.
1. Some elite class ruling brains think that higher income inequality leads to many people remaining in poverty while a rich few enjoy their lives and waste resources. So, some countries impose all kinds of taxes on the rich and use these taxes for the economic uplift of the poor. Most such countries like India who tried this failed to reduce poverty as well as reduce inequality. Then, when their socialistic ideologies brought India to near bankruptcy, the elite ruling class put their hands up for a while and allowed more and more people to become rich by their using their merit and hard work. In the process, the poverty levels in India has reduced significantly over the last 15 years.
2. There are some countries who just eliminated income inequality by one stroke: the elite ruling class took everything away from the rich, redistributed poverty among all people equally under what they called communism, as in the now defunct USSR (Soviet Russia) and countries like Poland, Yogoslovia etc who followed them. After a few decades, these countries had continued to have 100 % people with more or less equal income, except that the ruling party functionaries enjoyed very good lives while the rest had to depend on them for rations. The system failed as it made most people live under oppression of the ruling elite and lost virtually all freedom and choice a human being cannot live without. THE USSR disintegrated after 50 years of communist oppression.
3. Japanese followed a different model. Their ruling elite classes made a pact with the rich business people to strive for higher and higher economic growth so that no one lives in poverty and forget thinking about income inequality. They succeeded in becoming one of the richest countries of the World with most people enjoying descent lives by means of hard work with life-long assurance of jobs in the same company. The country's politicians and business tycoons enjoyed the best of the life in the World but the mass of people do not bother about what their income inequality figure is.
4. Japan's model was copied in some way by many south-east Asian countries. Their ruling classes were for fast economic growth by producing and exporting the cheapest available goods, made people free to earn as much as possible and arranged for some support to those people who failed to compete and earn adequately. The question of income equality did not bother them. These are Asian tigers like Hong Kong ( now taken over by China), Singapore, South Koprea and Taiwan. But those south east ans asian countries nearby who worried about income inequality, abolished all income inequalities on paper and remained poor countries with most people in poorer conditions as one finds in Mynamar, Indonesia and others.
5. The elite classes in the Western countries like UK, Germany, France, United States and other countries gave birth to the idea that lower income inequality is desirable, used taxes and subsidies to reduce such inequality and remained higly satisfied with their tax-subsidy regimes notwithstanding,however, small the effect of these margins have been. In the West richest people are admired and people read about them amnd their talents and succeses in magagines and newspapers. They continue to remain among the richest countries of the World and often allowing poor people from other lands to immigrate, legally or illegally,
and later become their citizens with a few sharing the top ranking among the richest in their countries within 3 to 5 decades.
The short point is why should one worry about income inequality. It is better to worry about how to make everyone as much richer as possible ensuring that no one remains in povertyand no one can ioppress others by using money. Most people want better economic life for them. They are not inclined to be naturally jealous about some others being far richer than them. The problem is not about income inequality. The problem is about freedom and empowerment to become rich not being available.