Indeed, free enterprise has income inequality; however, all other economic systems have more extreme inequality. The more critical issue is that the highest wealth production comes from free enterprise. Not only does socialism produce much less wealth for everyone and more extreme poverty for the poor, but it also comes with the added disadvantage of lower control by the individual. |
In the free enterprise system, it is helpful to understand how income is distributed. Everyone distributes the money they have to the people they buy things from, and money is distributed to you by you working for someone or market your products and services to the public. If you want more money allocated to you, then work more hours, add a useful machine, work more productively, and examine different areas of work at higher pay rates. |
If you are concerned about income inequality, are you examining how YOU distribute your money? Do YOU distribute it, by way of spending it, evenly to everyone in your neighborhood, city, state, country or even the seven billion people around the world? Do you look for those earning nothing or very little and concentrate your spending with them? |
The guys making the most substantial incomes deserve that money because a lot of people are freely choosing to give them the cash versus someone else for the service they are providing. If you stop or heavily tax someone making ‘too much,’ you are stopping or at least disincentivizing them from serving others. |
Many will try to play tricks with the tax code to try to partly even the inequality. If the government needs $100 X in a 100-person economy, they should take 1X from each person. To try to even things, they switch it to a percentage of income. Mixing a head tax with a simple percentage tax is a real practical necessity. They further do tax deductions, exemptions, and credits. These do harm to the economy, and the poor always do worse in a weaker economy. |
If you concentrate on your income and not covet the salaries of others, your attitude and life will improve. It is perfectly fine to see what others with higher incomes are doing and learn from them; the sad part is the resentment of others, trying to take their money, or using the law to punish them. Remember the rich cannot make their money without serving you and others. |