A major cause of inequality is the rate of the income Taxed
with the progressivity of the tax system. Almost every third world countries
wont relay on tax revenues form progressive taxation but rather relay on value
added tax- The tax that is from consumable goods. For example in Lebanon the
Value 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 is
progressive and will reach to a maximum of 21%; while, the corporate tax is a
flat tax of 17%. Comparing to Lebanon USA’s progressive tax on wages is up to
55%, and the corporate tax is progressive as well to a maximum of 35%.
Education plays a very high role is creating inequality of
diminishing the inequality among the population. The access of individuals to
education varies some are getting very good education while others are being
ignored regardless of their hard working or brilliant mind. The demand for
education by population is very high but due to increasing in private schools
are universities is leading to inequality because of their high tuitions to enroll
in certain teaching institutions.
Those who can not afford to go to private sector are going to
public sectors to pursue their education, and the rising demand of companies
for good education is leading to increase in Inequality.
A very recent study conducted by Oxfam’s shows that the
richest 1% now have more wealth than the rest of the world as combined
population. The Global inequality that we fear is worse than we imagined. We
know this much but what we don’t know is that those rich 1% hide so much of
their wealth In Tax Havens-A tax haven is a country that offers foreign
individuals and businesses a minimal tax liability in a politically and
economically stable environment, with little or no financial information shared
with foreign tax authorities. It is impossible to know how much wealth they
have. Recent estimation is made that up to 32Tn$ is hidden in tax havens which
is around 1/6 of the world’s total private wealth. If we add this to their
already wealth it would look much worse than we know.
Over the past few decades inequality has been so bad that, in
2000, Americans were 9 times richer than Latin Americans, seventy-two times
richer than subSaharan Africans, and a mind-popping eighty times richer than
south Asians. These numbers give us a sense for how unfairly the global economy
distributes our planet’s wealth.