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Social inequality is not a law of nature. Five measures could reduce the gap between rich and poor.
The good news is that inequality between the countries of the South and those of the North is decreasing as the gross domestic product increases, especially in the emerging countries. The bad news is that in countries around the world, the gap between the rich and the poor is widening. But inequality is not a law of nature. There are both political and economic measures to combat inequality.
Progression and tax evasion
Tax progressivity taxes high income to a higher percentage than low income. The principle of progressivity is the most effective measure for the redistribution of income within a society. In many countries, however, labor income is taxed at a higher rate than income from assets such as shareholdings. The fiscal reform of President Donald Trump is in that line. This produces a redistribution from the bottom up instead of the other way around.
Tax evasion is also a big problem. The Commission of the European Union estimates that member states lose between 50 and 70 billion euros each year due to legal tricks on the part of the wealthy and large companies. A return to the principle of progressiveness and a system in which the rich pay more than the poor could finance government investments in education and health, for example.
Prosperity and poverty, side by side.
The one who harms should pay
Today the economy works globally. The raw materials are bought where they cost less, then the product is manufactured in countries with low wages and sold worldwide. The profits are then taxed where it is most favorable: in the so-called tax havens. However, the costs of these globalized production chains are paid by citizens and the environment.
An obligation to pay taxes at production sites and a global registry to prevent tax evasion and money laundering could secure resources for public investments. The direct responsibility of the companies for environmental damages would be an incentive for the production of products that are more respectful with the environment.
When large companies threaten to relocate a factory in another country because wages there are lower, governments often support them. What is lost in the process is fair wages, job security and social security. Low wages also mean less income for the State and with it less money for public investments.
While cheap labor may have a positive impact on corporate profits in the short term, they will lose in the long term if they are affected by protests, strikes and social unrest.
Those who want to succeed in the digital economy must invest in education.
Education for all
Education is the guarantor of social progress throughout the world. With the “Agenda 2030” of the United Nations, the member countries have committed themselves to ensuring education for all until the year 2030. More and more jobs require a high level of education. A good educational system for all guarantees better paid jobs and promotes democracy and participation in society through equity.
Either in rich or poor countries: women earn on average less than men and are less likely to belong to the political or economic elite. If the match continues at the same rate as before, it will take 217 years until men and women have the same income.
Can we afford to discriminate against half of the world’s population? Studies show that women prioritize education and good nutrition for their children. Without the active participation of women, both economically and politically, it will not be possible to reduce social inequality in the world.
The preservation of a social order depends on each and every member of that society freely adhering to the same moral principles and practices. Islam, founded on individual and collective morality and responsibility, introduced a social revolution in the context in which it was first revealed. Collective morality is expressed in the Qur’an in such terms as equality, justice, fairness, brotherhood, mercy, compassion, solidarity, and freedom of choice. Leaders are responsible for the application of these principles and are accountable to God and man for their administration. It is reported that a man went to Hazrat Umar R.A., the second khalifa, to talk to him. It was nighttime, and a candle burned on his desk. Hazrat Umar R.A. asked the man if what he wanted to discuss was personal. The man said that it was, and he extinguished the candle so as not burn public funds for a private purpose. Leaders in Islam, whether heads of state or heads of family or private enterprise, have a higher burden or responsibility than others.
There is a relation in Islam between individual responsibility and the rights and privileges derived from membership in the community. Individual obligations must be met before one can claim a portion from the community of which he is part. Each member of a society must fulfill his own obligations and rely on others to fulfill theirs before that society can acquire the necessary reservoir of social rights and privileges which can then be shared by all. The notions of brotherhood and solidarity not only impose upon the community the duty to care for’ its members, but also require each person to use his initiative to carry out individual and social responsibilities according to his ability.