Tackling income inequality
Sadiq Ahmed
The substantial reduction in poverty in Bangladesh since independence is a cause for celebration. A major reason for this decline in poverty is the rising per capita income, growing from less than 2 percent a year in the 1970s to around 5 percent a year in the 2000s.
Yet, it is worrisome that an estimated 47 million people are still below the national poverty line. Continued rapid growth in per capita income will help reduce poverty further, but the ability of higher growth to lower poverty is hampered by growing income inequality. Available evidence from the Household Income and Expenditure Surveys (HIES) suggests that income inequality as measured by the 'gini coefficient ' has been rising, growing
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Notable other countries that have experienced growing income inequality along with rapid economic growth include China and India. In economic literature, there is a debate popularised by Nobel Laureate Simon Kuznets about whether low income countries will have to experience some increases in income inequality before they reach a threshold level of income after which income inequality will fall.
The validity of this inverted U-curve relationship between growth of per capita income and income inequality, popularly called the Kuznets-hypothesis, has been researched extensively but inconclusively. A priori, there is no obvious reason that income inequality must increase in order to achieve high rates of economic growth. The observed phenomenon in many countries is a reflection of initial unequal distribution of wealth and assets and the fact that the underlying growth strategies and policies have not specifically addressed the inequality
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A closer look will suggest that a strategy to mobilise this additional funding is certainly within the reach of public policy.
In the first place, the government spends some 4 percent of GDP on subsidies, of which 3 percent of GDP is on energy. This can be cut by half through price increases and diverted to the above mentioned more socially responsive spending.
Secondly, a major reason for the resource constraint is low tax collection, especially from personal income taxes. Bangladesh collects a mere 1 percent of GDP from personal income taxes while the top 5 percent of the population owns 25 percent of the total national income. This yields an effective income tax rate of 4 percent, which is ridiculously low.
Increasing the effective income tax to even 10 percent would yield income tax from this group alone in an amount of 2.5 percent of GDP. Applying the tax rate to the top 10 percentile that owns 35 percent of the national income will yield 3.5 percent of GDP. This will require closing of loopholes that lets capital gains escape the tax net, introducing a modern property tax system, and improving tax administration and
Based on freedom and equality, America is today the country the most unequal amongst developed countries. Today there is a very big difference between the ideal, what Americans think and the reality of the income distribution. There is only a very small share in the middle class. This is a major crisis in the United States indeed, 1 per cent of the rich have 40 per cent of the country’s wealth.
Economic inequality is the uneven distribution of wealth and differences in economic security found in each individual in a specific country or region. Today, the topic is being discussed profusely by the American presidential candidates and by many writers around the world because of the beliefs of whether there should or should not be wealth redistribution policies put into action. Larry Schwartz, the author of “35 Soul-Crushing Facts about American Income Inequality”, makes a valid claim that economic inequality is the foundation of the problems that the entire American population face such as poverty and a hindrance of economic growth. To begin with, Schwartz has an exceptional argument that the high rate of economic inequality, like is
The wealthy continue to grow as they get more of everything and the lower class continue to get less. The average wealth has increased over the last 50 years, but it has not grown equally for all. “ Families near the bottom of the wealth distribution (those at the 10th percentile) went from having no wealth on average to being
While wealth inequality has always been an issue in the United States, it has became more of a pressing matter in America since the late 1980’s, and has only continued
The problem of income inequality is not something new, but it is something that people must worry about because it is affecting not only our wallets, but our communities as a whole. I agree on the author’s point of view about income inequality in the United States his position is very similar to another Robert Reich documentary called “Inequality for all” where he mentions all the aspects that brought United States economic system to a hold just to help a fraction of all population one of those systems was education where before the nineteen eighties it was cheaper to go to college than nowadays or the fact that workers were pay almost the same as any other for their sacrifice . Going back to the video on debate he mentions how policies changed
Inequality is known to all. Everyone now in days will get judge for everything. Inequality is not just in America it is every where and we got to stop it. And if you do not know what inequality is I will tell you what it is.
Throughout all of history wealth has never been distributed evenly; no monarchist kingdom, communist utopia, socialistic society, or modern free market has ever existed in a state of equilibrium. The laws of the land have always seemed to operate in a manner of some sort of prejudice. The rich generate wealth at a much higher rate than the poor. Income inequality has existed, in some form or another, since the first trade transaction. Since, we have begun record keeping, statistics show the rich controlling increasing amounts of the total income.
Income Inequality Income Inequality or “wage gap” is a big topic for freedom fighters and liberals for the simple fact that it isn’t equal for everyone. Because the wage gap is so prominent it's one of the biggest “facts” that discrimination is still apart of everyday American society. The wage gap from these radical interest groups think the economy is get a dollar take a dollar instead of a free flow economy. This misguided idea of the economy is absolutely not true and isn’t at the fault of the Government, but the people.
The United States was considered the land of opportunity for many generations, but the situation has now changed. America is no longer the country where all people can pursue their American Dream. The main reason why the lower class cannot achieve their goal of upward mobility is the fact that the top one percent of the population holds most of the wealth of the country. These wealthy Americans also have a better chance of increasing their wealth than the lower classes do. Wealth, or net worth, is not only made up of money; it also includes everything a person owns that is of value, such as their house and property.
We are all honor students here. I am honor student, and you are an honor student. Now, I am going to take away some of your points and give it to another student. You both have C’s now. This is grade equality.
Monetary imbalance doesn't exist, isn't as terrible as you think, or is good for everybody is what most defenders of the economic status would argue. Despite the observational confirmation that the divide between the rich and the working class is continuing to grow and that the pattern is voiding out the middle class, as well as correspondent to both 1930’s stock market crash and the Recession of 2008. Economic status defenders neglect to understand that it is only a brief timeframe before we face another money monetary crisis. It is critical that we learn and teach our present and future generation the historical backdrop of financial disparity to prevent them from confronting emergency.
1. Introduction Income inequality has grown significantly during this past decades and this phenomenon continues to increase over the years. This problem is constantly discussed in the daily news all around the world. Several consequences of this increase of inequality between people leads to economic problems such as high unemployment rates, lack of work for young people, fall of demand for certain product. The gap between rich and poor is increasing, the rich are richer and the poor are poorer as a result politicians and economists try to adopt certain policies in order to reduce this gap.
There are above average and below average graphically have lined-up on the recent graphs. The marginal comparison has shown according to the existing level of financial reports. Economic inequality in the U.S. has been differentiated widely based on the income level of every state. If the state has been generated more income and accumulate financial stability, then, the financial distribution among the citizens of that state will be fair. For example, in New York, their income has been accumulated above the average per capita, because of increasing businesses and other private sectors that have generate shared-income.
The problem with the widened wealth gap is that the inequality may harm the quality. Meaning that those in the higher classes see it as you can use the money with no restrictions. However, economist believe that the “relationship between inequality and economic freedom, with the possibility that policies that are meant to reduce inequality will reduce economic freedom, which will then only make inequality worse.”
How have income inequalities changed from 1980 to the present? Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus, a Gini index of 0