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Economic Inequality: The Gap Between The Rich and The Poor

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Economic inequality is an existed phenomenon in economy, which belongs to the gap between the rich and the poor. Like dividing a cake, every piece of cake which is held by people is not on average, so the inequality is happened in this proceeding. It is easy to find the reason which causes the unfairness is unfair dividing, which means persons who distribute the cake have selffishing thinking for cake receiver who are related to them in some dementions or themselves, so it is hard to become the fair outcomes of the cake.

The persons who take the dividing of the cake (dividers) have selfishing thinking always follow the high level power to make profit and supply plenty of people who have more larger power with the profit in darkness. The large powered people use their positons’special point to acquire items they want and money they want, meanwhile they would adapt their influence by coporating other people who are in consistant profit with them, which makes a insurance to take out steadily from the public resource. There is no doublt that no fairness is on touchable, but the hidden coporation still makes progress. The coporating between the selfished dividers and the getter in selfish is one of the reasons for forming economic inequality situation, which destroies institutions.

Assuming the money obtained through the trading between selfished power men and selfished obtainers is called the ‘bad money’ (Anonymous, 2010), the income obtained through labor and fair method is called becomes the ‘good money’. According to the logical result of the expulsion between the ‘good money’ and the ‘bad money’: If the bad money is equivalent to the good money, the existing institution does not punish those who hold the bad money. Society will enter a vicious circle like corrupting other profit and attaking the fair distribution.

Besides corruptions between some dividers and some holders, what could influence the economic inequality contains tax system, social welfare and location. There is a full illustration of the inadequacy of tax system. The rich, who are always published on some magazine like Forbes, are not as the pioneer of tax rankings, they try them best to avoid tax updating not handing the tax, therefore the lack of reasonable and necessary ‘limit height’ for high-income groups has led to the widening of the gap between the rich and the poor. Consequently, there is no doubt that the nation can effectively alleviate the gap between the rich and the poor by the complete tax system.

In addition to a reasonable tax system, a complete social security system can also alleviate the gap between rich and poor to a certain extent. However, compared with the extent of economic development, social security undertakings and social transfer payments clearly show a lag, add the uncomplete tax system, which will become a huge lag. In this context, farmers, urban retirees, unemployed people in towns and cities and their relatives are most likely to become poor people because they do not have timely and adequate security, as a result, it will widen the gap between rich and poor in society .

The income gap is too large, the wealth is too concentrated. Both things are enough to pose a considerable threat to economic development. The contrast between South Korea and the Philippines is a classic example. Around 1960, many economic indices in both countries varied considerably, including population, GDP per capita, urbanization, primary and lower secondary school attendance. The starting point was the same, after the half a century, South Korean economy quadrupled, becoming one of the ‘Four Asia tigers’ at that time, while the Philippine economy stagnated and social unrest. The main reason is that South Korea has more on average about income and land distribution than the Philippines, the Gini index during the two countries is 0. 2 different. There are also economists, they believe that Latin America’s slow economic development is due to excessive concentration of wealth.

In addition, not on standerd living conditions for the poor make them to lose their motivation to work and reduce their productivity, meanwhile social injustice and inequality have led to a gradual loss of national cohesion. The idleness of large numbers of population resources leads to serious social problems and threatens the long-term stability of society.

As far as I am concerned, firstly we should swing into action for the establishment of a complete social security system, which is the basic for constructuring harmonious society. It is not only related to the ability of hundreds of millions of people to live and work, but also to the stability of hundreds of millions of families and society. Secondly we need to Strengthen the construction of the legal system and use the law to make the lawlessness, power and money trading and other evil phenomena break down, which is to effectively address the disparity between the rich and the poor..

In addition, we need to establish laws to encourage those who get rich first to take on more social responsibilities, such as education, philanthropy or road repair. Finaly we would strengthen the function of tax regulation to ensure social equity, the gonverment should uprise the starting point of personal income tax which belongs to the rich and complete the tax system of vehicle purchase and use of vehicles and vessels, in addition to creating conditions for the introduction of social Security taxes. Besides that we should completely sechdule our national budget and increditablely use every amount of money to make nation economy strong in order that people feel rich and friutful life not poor.


  1. Anonymous. (2010, 02. 01. ). Gresham’s Law. Retrieved from EH. Net Encyclopedia: http://eh. net/encyclopedia/article/selgin. gresham. law
  2. Liang, F. (2017, 12. 05. ). How does Britain use taxes to regulate the gap between the rich and the poor in society?. Retrieved from www. ce. cn: http://views. ce. cn/view/ent/201712/05/t20171205_27102102. shtml
  3. Lyu, S. (2017, 10. 20. ). Philippines: The mystery of the sinking of Asia’s second richest country. Retrieved from www. zhihu. com: https://zhuanlan. zhihu. com/p/30299683

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