What is income inequality?
Let’s start with the US Bureau of Labor Statistics report for the year 2019, the median income by ages are: 25–34 years: $46,436. 20–24 years: $31,980. 16–19 years: $26,364. Now think about this statistics again and ask yourself why should I believe this statistics? Is in America everyone’s earning same as the statistics? Of course not, there is huge gap among middle class people, low class people and the riches. Different classes of people emerge in the society due to differences in income. So now, what is income inequality? In the society, different people earn as much as they get. And in this competition, the rich are ahead alone.
The middle-class people: Main Skeleton of democracy:
Income inequality is a major problem in our society. The society and culture of this era are interstates. Relationships are completely self-centered here. The people of the lower strata of the society are being oppressed by the whirlpool of interests. Corruption and dishonesty are the main sources of income when there is no difference between justice and injustice in society. This is how social and economic inequality begins. And as a result of this inequality, the number of super-rich is growing abnormally in most countries. At the same time, the number of middle-class people in society is decreasing. But middle-class people are the main basis of democracy. The picture of society is completely different nowadays. Now you should understand what is income inequality?
Violence of the elite:
Economic inconsistency and social instability are going on in society. The violence of the elite of society is increasing day by day. They live in luxurious buildings, using expensive cars, luxury arrangements including pleasure trips. These are the images of social inequality caused by income inequality.
The helplessness of marginalized people:
If society is a coin, it is the other side of the coin. Where helpless marginalized people live in slums, poor health and lack of treatment, illiteracy, drug business. These are the sad images of the endangered humanity of society. Rich-poor inequality is evident here. Socio-economic inequality starts with income inequality.
Society is falling behind:
Those who lag behind in education, health and nutrition and investment due to inequality are unable to contribute to the country’s economic development. Is social development at all possible by leaving the most number of people behind? So what is income inequality doing is falling society behind.
Why is income inequality a problem?
It is true that income inequality continues to grow in the United States. Wealthy people can fool you into presenting the benefits of this inequality. But everyone should have true knowledge about this. Let’s see why income inequality is a problem.
Insecure middle class:
Today you are living a middle-class life but tomorrow you may become a lower class. Inequality makes middle-class society very insecure. The economic downturn is one of the main causes of inequality. After any recession, US capitalism turns around very easily. But only rich families enjoy the benefits. As a result, rich families are dominating the capital market. Otherwise, the middle and lower class people have lost all their wealth and are becoming destitute.
Income tax maze and infinite chaos:
Earlier it was said how income tax is increasing inequality. In fact, the revenue law is enacted in such a way that it is in favor of the rich. This is creating a very rich class. On the other hand, corrupt people are not paying income tax. And thus creating economic turmoil between rich and poor where only the rich are getting the verdict of the palm tree.
Might is right:
Although the poverty rate has decreased, income inequality has increased. The standard for determining inequality is known as Gini-coefficient. According to the rules, if the Gini-coefficient is 0, there is no discrimination and if the value of the index is 1, it is called maximum inequality. From 1990 to 2019 the value of the Gini-coefficient is always upward. Statistics show that poverty is decreasing in the country. But the number of extremely poor is increasing day by day. The country is growing but it is not being poor friendly. So now, why don’t we call income inequality a problem?
The future of the youth:
Since the middle class is getting poorer their children are becoming a frustrated generation. As a result, the younger generation is getting involved in crime, trying to make money illegally. Also many of them are getting drug addicted, involving themself in drug business etc. Of course, inequality is responsible for their plight.
On the other hand, the children of the rich are being ruined by extreme luxury. With both money and power in their hands, they are not thinking before doing anything. If this condition of the youth continues, think about the future of society. Big crimes like rape and trafficking of women are happening in society easily. After considering everything, there is no question of underestimating inequality.
As a result of income inequality, the government is failing to improve the lives of ordinary people. There may be many more reasons to answer why income inequality is a problem but these are the major.
Causes of income inequality
Once a snake was repeatedly trampled underfoot by many people. The snake became restless with anger and grief and complained to God. God then said if you had bitten the first one, you would not have had to be under the second one. Exactly the same thing is happening in our society like this story. No government has taken any effective steps so far to prevent income inequality. What are the main causes of income inequality? To know more about this read the following reasons carefully.
Lack of good governance:
Income inequality is increasing. Many powerless people are becoming destitute and powerful people are growing up dramatically. Is this happening due to misrule? The rise of misrule slows down the pace of good governance. In the absence of good governance, a simple economy becomes a pocket economy. This is the source of all corruption. Income inequality also starts here.
Rogue and corruption:
Rogue is always produced in all countries. This is the result of corruption. In the normal course of politics, it can be said that not everyone has the desire to become a villain. A just and peaceful society will be established in the country through good governance. Corrupt people are increasing inequality by earning money illegally. If these corrupt people were to be punished first, then they should think before making money illegally. Society is now like that snake in the story. Lack of effective measures against corruption is increasing the level of inequality. Corruption and mischief are one of the major causes of discrimination.
Reluctance and irregularities in income tax is one of the main reasons for the increase in income inequality. In the late 1970, the United States undertook a program to deal with the aftermath of the Vietnam War. Then-President Ronald Reagan took it further, what is called neo-liberalism in economic terms. The present acute inequality began there. He reduced the maximum tax rate from 70 percent to 20 percent. In this way more money is collected in the hands of the rich. Since then, income inequality has been on the rise. The results of which we are currently seeing. Since the tax rate increases as the income increases, so many people want to evade this income tax. Many are evading income tax because they are earning money illegally. If this inequality continues, then social and economic inequality cannot be prevented in any way.
There may be many more reasons for income inequality but the reasons mentioned above are deadly. If anything else catches your eye, be sure to describe it below in the comment section. We’ll gladly present your opinion to our website wisdomvision.com by you permission of course.
Solutions to income inequality
Income inequality current situation:
The OEDC (https://data.oecd.org/inequality/income-inequality.htm) said in a recent report that global income inequality is growing rapidly. According to Gini-coefficient position of the US is at the forefront. Eliminating income inequality along with economic growth is a challenge for any country. Now the question is whether the rich will be sincere in eliminating income inequality? They must be. Professional people of all classes must take sincere initiative to solve this problem. We already know what kind of problems and instability income inequality can cause. So we should focus on the following solutions to income inequality.
Prevention of income tax reluctance:
One of the ways to eliminate income inequality is to tax the rich at a sequential rate. It is possible to eliminate some of the inequalities by restructuring the tax revenue collected from the rich and distributing the money and resources among the poor. On the other hand, the government can provide more assistance to the poor by borrowing from within the country or from abroad.
Everyone may have heard of the Panama Papers which painted a big picture of economic inequality. From this we learn that even the most powerful political businessmen, actors and actresses in the world are evading huge sums of taxes. The government should enact laws related to income tax so that no one can even think of tax evasion. On the other hand, it is the responsibility of the government to distribute the collected taxes to the poor properly.
Effective measures against corruption:
In order to reduce income inequality, first of all we have to reduce inequality between rich and poor. And in order to reduce the rich-poor inequality, first of all, effective measures must be taken against corruption. There is a great lack of accountability in our society, even if someone earns money unjustly, he does not have to be held accountable. Since the chances of getting rich legally are very low in our society, making money in a dishonest way has become the norm there. In this way the rich are making their destiny and ruining the destiny of others. The administration should become more active and stop it. But is it possible to solve the current level of political and bureaucratic corruption easily?
We need to find a way out of the way corruption has ravaged our entire production system. In that case the appropriate authorities have to be more sincere to solve the corruption and inequality.
Creation of employment:
Every hand should be given the opportunity to use it in productive work. Appropriate employment needs to be provided for the millions of young people entering the labor market every year. Inequality can be reduced by ensuring that the income of the poor people increases with the increase of national income through employment in the process of production. The wages of the working class must be increased and their standard of living must be improved. They have to increase their purchasing power. If their life is not signed, growth will not increase. It may not be possible to eliminate this inequality completely but if everyone is sincere, we can control it. This victory is no less for us.
What Blocks Income Inequality Solutions
According to statistics, the number of poor people in US is 10.5 percent where middle class is 52 percent. So, most of the people in the country are middle class and the rest are rich. However, only 2% own most of the country’s assets. The level of inequality becomes clear here. Since both the government and the people are aware of this then what blocks income inequality solutions? So let’s take a closer look.
The idea of the people of our country is that all happiness is on the other side of the river. What do you do if you are asked with two options in front of you? Every party wants to stay in power and this brings the continuous imbalances. When the parties come to power, they forget most of their responsibilities to move others away. By abusing power, many jump to make money quickly which also brings income inequality into the society. The first is negligence in duty and the secondly earning in an illegal way both are responsible for the rise of income inequality.
Profitable corporations and wealthiest people who benefited most from our economic and political system are not contributing their fair share. How can there be equality if the rich do not do the amount of contribution that is needed to bring equality to a society? This capitalist society of ours has opened up many avenues for the rich to avoid participation. The rich have to come forward first to bring back equality in the society.
In our society, the image of inequality of the society can be noticed only by looking at the standard of living of the laborers. The government must take full responsibility for raising the living standards of the workers only then they will be able to focus on economic development. But current labor standards are hindering the elimination of inequality.
Disgust towards income tax:
Fear of losing large sums of money the rich are choosing how to survive without income tax which brings corruptions and inequities. Income tax should be increased in proportion to the income and the income tax collection system must be fully successful here.
Lack of proper judgment:
The amount of black money seems to be skyrocketing due to lack of accountability. This practice of climbing the mountain of money and wealth must be suppressed now. And that is possible only through accountability.
The failure of the government:
Under the pressure of large and heavy industries, small and medium industries cannot take state assistance properly which brings inequality to the next level. Introduce a universal science-based system that will be non-discriminatory. How much role is the government playing in restoring equilibrium in the domestic economy?
The failure of the people:
How long will we continue to blame the government and the system? Now is the time to develop your skills, improve yourself and try to improve others too. This must come out of employee attitude and be entrepreneurial and if necessary, the help of the government should be taken here. It is not possible for the government alone to solve such a big problem without the help of the people. Are we not preventing the solution of inequality? How long will you sit with folded hands?
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