Covid and inequalities: What solutions for a better redistribution?

Covid and inequalities: What solutions for a better redistribution?


The more the rich become rich less he will have poor! A simple assertion that has great implications at the level of contemporary economies. The idea of ​​this axiom starts from a neoliberal theory; The theory of runoff which supposes that to increase the standard of living of the less nantis, the state must allow the enrichment of the richest. It is a theory subject to many controversies. The detractors of this theory say that runoff only digs the gap between the rich and the poor.

During the last US presidential election, the notion of runoff was at the heart of the debates. On the one hand, the Republican candidate, pleaded in favor of lowering the wealthy taxes to encourage them to continue investing heavily in the US economy. On the other hand, the Democratic candidate was for a progressive taxation regime. Tax the rich to increase public revenue.

In France, the removal of the ISF raised the anger of more than one. To defend this measure, the French government has made it clear that the abolition of the ISF aimed at removing money into the economy and to stop the flight from capital. Today, like never, the debate around the best method to redistribute the wealth is raging. While the COVID hit the middle classes and the masses, the most fortunate are enriched. Would it be appropriate to tax exemption to better redistribute?
The health crisis has been revealing inequalities in the world

There is no doubt that the health crisis has had considerable effects on almost all the world's economies. All social layers have been affected. However, the delay of damage recovery would not have been the same. An Oxfam report showed that the richest 1,000 people took only 9 months to recover their wealth as it takes about 10 years for the disadvantaged layers to reappear the pandemic damage.

It has been found between March and December 2020, the wealth of billionaires increased US $ 3,900 billion worldwide. At the end of the year 2020, their total wealth is $ 11,950 billion. In the United States, the growth of the wealth of the most fortunate has increased by 57%. Tesla's boss saw his fortune progress from 524% in 2020 and hits as the secondst richest in the world.

Even bell sound for French billionaires! In fact, according to the Oxfam report, the French billionaires won 175 billion euros between March to December 2020. However, in the fall of 2020, 8 million French people registered for the food aid program. The number of people applying for RSA has also increased vertiginously. A study of the economic analysis council explains that 20% of the poorest French have seen their savings decrease by € 2 billion while the 10% of the richest has increased by more than 25 billion.

The observation is clear: COVID has aggravated inequalities in the world. How will we be able to solve the redistribution problem to reduce exacerbated inequalities that are found at the level of OECD countries? Two approaches: the tax exemption against the wealthy tax.
Runoff theory: taxone to better redistribute
Arthur laffer: Too much tax kills tax!

The tax exemption or "Tax Cut" in the United States, as well as it is well known, is an economic policy aimed at decreasing or "CUT" taxes or obligations of the rich to stimulate economic growth. The theory of runoff takes all its form in this economic policy because the tax exemption will be a means allowing the rich to increase their wealth. In corollary, the more the rich become rich less there will be poor.

To understand the notion of runoff, another liberal approach to tax exemption must be used: the laffer curve. Luffer illustrated a simple axiom in economics: "Too kills the tax". The Laffer curve demonstrates that beyond a certain levy threshold, tax revenues would decline due to disincidental effects on the labor supply. The best solution would be to establish a progressive tax regime to encourage ricochet investments would lead to an increase in tax revenues.

Ronald Reagan and Margaret Thatcher were the two figures of bow from Laffer's taxation policy. When Margaret Thatcher lowered the tax bracket from 83% to 60%, then to 40%, the British tax revenues had increased by 1.2 billion pounds sterling. In 2006,