A banner used by many politicians is the reduction of inequality and achieving income equality.
This rhetoric serves to justify progressive increases in taxes on the rich and with those resources theoretically reduce inequality through the distribution of money by the rulers to the poor.
That objective is not only on the agenda of the left, there are priests, businessmen and intellectuals of good faith who see as a social evil the logical inequality of income on the road to progress.
The real social problem to overcome is not income inequality, but poverty. Experience teaches us that the process of poverty reduction is generally accompanied by an increase in inequality.
The poor want to progress, not be equal, although demagogic rulers make them believe that the equal distribution of wealth by the State is more equitable than that of the market and they justify State capitalism with that myth.
The equality that should be sought in a democratic country is before the law and opportunities, not the mythical, but politically profitable, equality of income.
China, in 1981, still with Mao’s socialist structure, according to the Gini Index, had an inequality of 28.8, which means that great equality prevailed. In the Gini Index, the lower the number, the more equality; and greater number, more inequality.
By effectively abandoning socialism, opening the Special Economic Zones or islands of capitalism, which imply low taxes, labor flexibility and production freedom, China increased inequality to 38.5 (2016) according to the Gini Index, but they came out of poverty more than 700 million Chinese.
The State of California has a high degree of inequality, 48.9, higher than Mexico’s, 45.4, but with an average income per inhabitant nine times higher than Mexico’s. In that US state, millions of Mexicans earn in one hour what many Mexicans receive in wages for several days in their country. The remittances of dollars by Mexican workers in California represent almost 50 percent of the remittances that arrive in Mexico, more than what we receive from oil exports.
We must reduce poverty, and not deceive the people with the myth of income equality, which only justifies more taxes and a distribution of money by the rulers to win votes, without structurally reducing poverty.
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