Thursday, January 28, 2016

[tvozzfra] Is income inequality inevitable?

Hypothesized mechanisms at work:

Globalization and automation keep progressing, naturally producing income inequality unless a government artificially does redistribution, probably through taxation.

People who can make high income will move to jurisdictions with favorable tax policies.

Countries and jurisdictions compete in a "race to the bottom" for the most favorable tax policies to attract or create people who make high income.

Countries with unfavorable taxation and also enforcing restrictions on movement using fascism will experience civil unrest until the regimes topple or the policies get relaxed.

Inspired by communism and the Eastern European brain drain.  If this economic analysis is correct, then it is truly dismal science.

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