Importance of Redistribution of Wealth

As a result of work and capital, a certain level of wealth is obtained. This wealth is distributed unequally. In general terms, it can be affirmed that there is a minority that has high well-being and broad sectors of the population who have limited resources and even very few resources. As a consequence of this reality, the need to redistribute wealth based on criteria of social justice and equity arises.

The purpose of tax collection is to establish mechanisms for a fair redistribution of wealth

Economic resources are obtained from the taxes paid by citizens to the state coffers.

With these resources, the state implements a double action:

1) maintain a series of institutions and services related to justice, defense, infrastructures, health, etc. and

2) provide a series of benefits and aid so that all citizens can have access to a equal opportunities (these aids take the form of scholarships, social benefits, grants, etc.).

This double performance of the state represents the fundamental mechanism for the redistribution of wealth. The question that must be raised is why, in many countries, the rules benefit those who they have more, with reductions and advantages with respect to the classes that are in steps lower.

State intervention is not enough to achieve a fair redistribution of wealth

The role of the state can cover some needs, but it is evident that its intervention does not solve inequality. For this reason, the citizens themselves organize themselves by creating entities of different nature, such as humanitarian aid NGOs, private foundations or any type of organization aimed at helping those most in need.

In most religious beliefs, almsgiving is aimed at helping those most in need and, therefore, it is a practice that somehow has as its objective the redistribution of the wealth.

The historical debate on the problem

This question has provoked all kinds of debates. In the 19th and 20th century the motion communist represented an attempt to overcome this situation, but when the communist model was imposed the desired redistribution generated all kinds of problems (shortages, lack of freedom, oppression…).

In recent decades, new alternatives have been proposed so that the differences between rich and poor are reduced. The two most significant initiatives are the following:

1) the social platforms that propose that 0.7% of the GDP of nations be allocated to aid for development and

2) the Tobin rate intended for the set of transactions financial institutions generate a collection for social purposes.

Fotolia. gow27/aleutian