Economics of Equality

I believe that equality is a state of being, one in which all people are given the same opportunities to live a life that is physically, mentally or spiritually stimulating. If one person chooses to squander an opportunity while another can take advantage, then equality is served because both persons had at least the option. Inequality arises when one group of people thrive at the expense of others; whether they are marginalized due to race, gender, or otherwise is inconsequential. The logistics of control as it relates to the public and private realms is a debate that is very important, however it is one that will be left for another time. In this post, I would like to discuss an article that was written by famed economist Walter Williams: http://www.gmu.edu/departments/economics/wew/articles/08/A%20Nation%20of%20Thieves.htm

Without regurgitating the column, Mr. Williams raises some questions regarding the practice of attempting to equalize income through taxation and redistribution of money amongst citizens. This action creates disincentives for hard work and the pursuit of success in ones career. Additionally, a substantial economic burden is created when the highest income earners are taxed at ‘unfair’ rates considering these income earners contribute to the majority of personal consumption figures. In a recent interview with CNBC’s Larry Kudlow, Walt Williams described redistribution of income in a nutshell by saying that “reaching into your own pockets to help your fellow man in need is praiseworthy and laudable… reaching into somebody else’s pockets to help your fellow man is despicable and worthy of condemnation”. Stealing is stealing, whether you are a man holding up a liquor store with a gun, or you are a member of a national government. Opportunity is Equality.

It is my hope that politicians in both Canada and the United States can see the benefits of a balanced tax and budget structure. Flat personal income tax, lowered consumption and corporate tax levels and an end to double taxation of dividends and capital gains are all net positives for economic growth. These policies would benefit the local currency, standard of living for all residents and increase trade and foreign investment. Any type of revenue collection and redistribution through government is fatally flawed because of the money drain arising through ineffective program management by the government ‘middleman’. Bureaucracy and lobbying are commonplace in government and if one thing is for certain, one dollar in revenues collected for an intended social program arrive as only a fraction of their initial value. Unfortunately, this type of reform may be a long way away, because as Mr. Williams stated in the aforementioned interview, taxation and redistribution in the name of fairness “sells with people who have the politics of envy”.