A major cause of inequality is the rate of the income Taxedwith the progressivity of the tax system.
Almost every third world countrieswont relay on tax revenues form progressive taxation but rather relay on valueadded tax- The tax that is from consumable goods. For example in Lebanon theValue added tax is 11% which is a very high rate in relation to Europe or USA,the average tax world wide is 7%. The Lebanese tax system on income isprogressive and will reach to a maximum of 21%; while, the corporate tax is aflat tax of 17%. Comparing to Lebanon USA’s progressive tax on wages is up to55%, and the corporate tax is progressive as well to a maximum of 35%.EducationEducation plays a very high role is creating inequality ofdiminishing the inequality among the population. The access of individuals toeducation varies some are getting very good education while others are beingignored regardless of their hard working or brilliant mind. The demand foreducation by population is very high but due to increasing in private schoolsare universities is leading to inequality because of their high tuitions to enrollin certain teaching institutions.Those who can not afford to go to private sector are going topublic sectors to pursue their education, and the rising demand of companiesfor good education is leading to increase in Inequality.
A very recent study conducted by Oxfam’s shows that therichest 1% now have more wealth than the rest of the world as combinedpopulation. The Global inequality that we fear is worse than we imagined. Weknow this much but what we don’t know is that those rich 1% hide so much oftheir wealth In Tax Havens-A tax haven is a country that offers foreignindividuals and businesses a minimal tax liability in a politically andeconomically stable environment, with little or no financial information sharedwith foreign tax authorities. It is impossible to know how much wealth theyhave. Recent estimation is made that up to 32Tn$ is hidden in tax havens whichis around 1/6 of the world’s total private wealth.
If we add this to theiralready wealth it would look much worse than we know.Over the past few decades inequality has been so bad that, in2000, Americans were 9 times richer than Latin Americans, seventy-two timesricher than subSaharan Africans, and a mind-popping eighty times richer thansouth Asians. These numbers give us a sense for how unfairly the global economydistributes our planet’s wealth.