Friday, August 5, 2011

Its not a redistribution of your wealth when you didn't earn it on your own...

Why does a bus driver in Sweden get paid more than a bus driver in India? Or equally trained doctor paid more in the US than in the Philippines? Or an economist in Belgium more than one in Kenya? 

Are they more valuable or more worthy of higher incomes? 

Nope, government policy protects these individuals from a free flow of labor that would lower wages to the markets true equilibrium. Its not "redistribution of your wealth" to tax high income earners at higher rates of taxation when that wealth is higher not because of your effort but because of government policy.

The proportion of your personal income coming because of government policy, social capital, and institutions; the proportion of your income that comes from "free riding" increases as you move up the income level.

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