Wealth Inequalities In Russia

Inequalities are still present now as well as in the past, but the inequality varies from one country to the other. On one hand, “Russia has one billionaire for every $11 billion in wealth while, across the rest of the world, there is one billionaire for every $170 billion” (RadioFreeEurope/RadioLiberty, 2015). Whereas in Norway the top 20 percent earn four times more than the bottom 20 percent (Oecdbetterlifeindex.org, 2015). Although some would argue that government policies are un-efficient and time consuming such as wealth tax, increasing minimum wage and introducing maximum wage. However, some would disagree and suggest the opposite that without such policies the gap between rich and poor expands. This paper will point out that policies …show more content…
However, it sometimes argued, that the problem with wealth tax is that it is difficult for government to value the riches wealth, even the rich does not know exactly how much they worth. According to the recent date from the Federal Reserve (Wall Street Journal, 2012) shows how one percent of the top wealthy assets are valuable, which means it can be sold easily and this is about 38 percent of their wealth. But about 62 percent of their wealth is “non-financial” which means it is hard for government to value and put a tax on such as private businesses, which accounts for 40 percent of their wealth. It can be seen that wealth tax is time consuming for government and sometimes un-efficient as seen above where wealth is divided between two categories, and the second problem is that the government will have less time to focus on providing other public services. However, to have a better fair tax system, there should be an implementation of a federal wealth tax system alongside income tax. This is also important as it covers “old wealth” such as inheritance, people who inherent money are not concerned about income tax but will be affected by wealth tax. (Wall Street Journal, 2012) suggests in the case of wealth tax it is more focused on how much wealth each household acquire rather than income tax. Wealth tax is based on each household listing their …show more content…
One the other hand, some would argue that if government imposed a minimum wage it will effect negatively businesses and this will subsequently effect economic growth and Gross Domestic Product. On February 2012 Marcus Yam published an article about Charles Cestaro’s successful business in Cleaning services and who he provides his workers a minimum wage of $7.25 per hour. The argument by here is that there is a demand for a job at a $7.25 minimum wage and that is clearly an evidence to show that people are willing to work at such a rate and that if wages increased low skilled workers will be left out, as with a rise in labour rate is also a rise in the demand for skilled workers. Now from a business perspective which is what Cestaro is considering is that his cost will increase as more wages has to be paid, this can lead to a loss in economic efficiency as Cestaro will either try to cut down on other costs or increase the price for an hour. Consumers they will either think the prices are now higher then ‘lets do it ourselves’ and save money thus leading to a less flow of money supply. However, due to an increase in essentials needs like food, water and gas and economic uncertainty an increase in minimum wage has to be introduced. (The Living Wage Foundation, 2012) mentions how Governments and policymakers can adopt policies such as increasing minimum wage as