Many countries have a weird notion of socialism. They take money from the hardworking and distribute it among the so called poor people under the garb of equality.
Induction of equality shall never undermine the contribution of extra hard working people else it will give rise to liabilities who think they are entitled to equality despite insignificant/disproportionate contribution.
People who contribute more shall get more privileges. Nevertheless all the citizens loyal to the country shall be given a basic set of inalienable rights (subject to reasonable restrictions and societal expectations)
If the said people are made to do compulsory community work in order to contribute as much as a rich man contributes in taxes, they would cite human rights to get rid of the labour.
Many leftist politicians and self proclaimed intellectuals promise to alleviate poverty by leaving no person below average :
Consider two positive numbers a and b
Their AM = (a+b)/2
Their RMS = √((a^2+b^2)/2)
Their GM = √(ab)
Their HM = (2ab)/(a+b)
Any kind of aforementioned mean (or ‘average’) will always lie between a and b.
This means that if the magnitude of difference between a and b is non zero, one of them will be greater than any of the aforementioned means and the other one will be smaller/less than any of the aforementioned means.
If a=b then all the means will become equal to a (or b) but this is not feasible in the real world.
If every person has equal income (thus equal tax payable), the previously poor people would cite historical reasons and demand tax concessions. This would lead to reduced tax collection and the economy would dwindle.
Here’s an example:
Consider a society where net wealth is 500; the wealthier faction holds wealth=400 whereas the humbler section holds wealth=100
Consider that the tax rate is 30% for the wealthier section and 10% for the humbler section
In this case, the total tax collected is 120(wealthier)+ 30(humbler) = 150
Now, if the wealth is distributed equally, each section now holds wealth=250
Now, due to the equal distribution of wealth, no economic disparity exists so, to get the same amount of tax, they should pay 75 each so that
75+75=150
but, if they cite historical reasons and get the concession offered earlier, the tax collection would now be 100 [75(previously wealthier)+25(previously humbler)]
This is 33.33% decline. Such drastic decline will not be able to sustain the previous standard of living. Also, since the previously wealthier section is no longer wealthier due to the redistribution, it would be difficult for them to pay the tax at previous rates. Also, it would be pure discrimination if they have to pay more despite the equal amount of wealth possessed after redistribution. The so called leftist intellectuals fail to address these points.
If an ecosystem has 1000 lions and 1000 deer, it is not feasible because on average, only about 10% of energy stored as biomass in a trophic level is passed from one level to the next. This is known as ‘the 10 percent rule’. Hence in a feasible setup the number of deer should be greater than the number of lions (this is just a reference to ecology and shall not be taken otherwise)
In reality, the absolute wealth needs to be increased
Consider the following :
Case 1
Total wealth = 100
Group 1 : 50
Group 2 : 50
Disparity : nil
Case 2
Total wealth : 1000
Group 1 : 900
Group 2 : 100
Disparity : yes
Despite unequal distribution, people in case 2 are richer.
Gini coefficient intends to represent income equality. It is a number between 0 and 1 where 0 means perfect equality and 1 means perfect inequality.
Gini coefficient of Austria(2018) is 0.308 whereas Gini coefficient of Myanmar(2017) is 0.307. Despite higher income inequality, people in Austria are in general wealthier than the people of Myanmar.
In businesses too, most of the income comes from around 20%-25% of the regular customers/top spenders. Hence, companies focus more on them and give them special coupons and concessions. However an assured minimum non trivial amount of attention is given to all the customers.
The illustrations clearly show that the idea of so called equality is just a stunt performed by the so called leftist intellectuals and self proclaimed reformers to pose a fabricated, perennial looking problem so that they can garner support by making unreasonable (impossible to fulfil) promises.
Source (Gini Coefficient : https://data.worldbank.org/indicator/SI.POV.GINI)
