Does socialism increase inequality?

Nina Bandelj and Matthew Mahutga (2010) find that income inequality in socialist Central and Eastern European countries was lower than in other countries at a similar stage of development. Furthermore, inequality increased substantially after the fall of communism.

Is there a solution to the problem of inequality?

Another way we can decrease inequality is to increase social services such as the following: increase food stamps for poor people; raise the min- imum wage; increase social security for people in the poor, working, and middle classes; increase unemployment compensation; create more college grants and loans for people …

Is socialism an equality of outcome?

Socialism is based on a principle of distribution whereby individuals receive compensation proportional to the amount of energy and labor they contribute to production (“To each according to his contribution”), which by definition precludes equal outcomes in income distribution.

What is an example of economic inequality?

Common examples: 50/10 ratio – describes inequality between the middle and the bottom of the income distribution. 90/10 – describes inequality between the top and the bottom. 90/50 – describes inequality between the top and the middle.

How does the government reduce income inequality?

If a society decides to reduce the level of economic inequality, it has three main sets of tools: redistribution from those with high incomes to those with low incomes; trying to assure that a ladder of opportunity is widely available; and a tax on inheritance.

How can governments reduce inequality?

Governments can intervene to promote equity, and reduce inequality and poverty, through the tax and benefits system. This means employing a progressive tax and benefits system which takes proportionately more tax from those on higher levels of income, and redistributes welfare benefits to those on lower incomes.