With lacklustre growth and government revenues being squeezed more and more, there have been renewed calls worldwide for governments to increase taxes on the rich and to redistribute some of this wealth to the poor. Many have fallen into the trap of assuming that it is because some people are rich that others are poor. Using the rich as scapegoats by focusing on income inequality, however, misdiagnoses the problem and shifts attention away from the real reason why millions are poor.
This article was first published by the Business Day - 02-03-2015
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Jasson Urbach is an Economist and director of the Free Market Foundation.
Publish date: 02 March 2015
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.