In 1993, the UNO declared October 17 as the International Day for Eradication of Poverty. The theme for this year is 'Moving from humiliation and exclusion to participation:ending poverty in all its forms'. (hence the title xD)
For decades now, poverty has been a vicious complex web owing to economic as well as socio-cultural shortcomings. One-tenth of the world's population is below the International Poverty Line. In India, poverty is one of the major three challenges to economic development, the other two being illiteracy and excess population. A staggering 21.9 %, that is. more than one-fifth of the population (approx. 340 million) comes under the BPL (Below Poverty Line) category. This also implies that the current number of poor people in our country exceeds the total population in 1947!
Poverty is a result of various factors like illiteracy, unemployment, economic crises and excess population. Hence, it can be dealt with only at a macro level. Though all the poverty alleviation programmes and public welfare schemes are quite helpful in overcoming the challenge, some crucial changes in monetary and financial policies are also required. A very essential goal being just distribution of income and wealth. Here, governments around the world face a dilemma- how to reduce debts and deficits and support development, growth and employment as anxious financial markets rattle the global economy. A similar challenge is ensuring fiscal sustainability while reducing inequality.
To ensure an equitable distribution of income and wealth, progressive taxation is one of the most emphasized solution. Tax and spending side of the equation should be viewed as a whole. Like,Value Added Taxes. These are not necessarily re-distributive in themselves but can be used effectively and efficiently to pay for spending to benefit the poor.
Income inequality is also exacerbated by tax evasion at the hands of the wealthy, who have greater opportunities for and benefits from tax evasion. Stringent laws against tax evasion are an equally important measure.
Also, there are a number of potential revenue sources that can contribute to both financial sustainability and improved equality:
1. Tax on Personal Income: Owing to weak administration in low-income countries, advanced economies are better able to use this tax in general, and rely on it for re-distributive effects through progressive rates. As supported by empirical evidence, fears that progressive rates will lead to labor migration are generally overstated.
2. Taxation of natural resources: They are sources of location specific rent. Taxing such rent is efficient and avoids the economic distortions arising from other factors of production.
3. Property Taxes: These are under-utilized in most of the countries. Low income economies specially have room to increase revenue from this source as incomes rise.
Poverty is not merely an economic problem, it is also a social stigma. Class differences lead to dissatisfaction and disharmony. Poverty also compels many to resort to theft and robbery to sustain for necessities.It is the poor who are easily brainwashed by anti-national groups and engage in terrorist activities. Also, to ensure increased levels of awareness and political equality, it is first necessary to achieve economic equatibility because, of what use are rights to an empty stomach?
For decades now, poverty has been a vicious complex web owing to economic as well as socio-cultural shortcomings. One-tenth of the world's population is below the International Poverty Line. In India, poverty is one of the major three challenges to economic development, the other two being illiteracy and excess population. A staggering 21.9 %, that is. more than one-fifth of the population (approx. 340 million) comes under the BPL (Below Poverty Line) category. This also implies that the current number of poor people in our country exceeds the total population in 1947!
Poverty is a result of various factors like illiteracy, unemployment, economic crises and excess population. Hence, it can be dealt with only at a macro level. Though all the poverty alleviation programmes and public welfare schemes are quite helpful in overcoming the challenge, some crucial changes in monetary and financial policies are also required. A very essential goal being just distribution of income and wealth. Here, governments around the world face a dilemma- how to reduce debts and deficits and support development, growth and employment as anxious financial markets rattle the global economy. A similar challenge is ensuring fiscal sustainability while reducing inequality.
To ensure an equitable distribution of income and wealth, progressive taxation is one of the most emphasized solution. Tax and spending side of the equation should be viewed as a whole. Like,Value Added Taxes. These are not necessarily re-distributive in themselves but can be used effectively and efficiently to pay for spending to benefit the poor.
Income inequality is also exacerbated by tax evasion at the hands of the wealthy, who have greater opportunities for and benefits from tax evasion. Stringent laws against tax evasion are an equally important measure.
Also, there are a number of potential revenue sources that can contribute to both financial sustainability and improved equality:
1. Tax on Personal Income: Owing to weak administration in low-income countries, advanced economies are better able to use this tax in general, and rely on it for re-distributive effects through progressive rates. As supported by empirical evidence, fears that progressive rates will lead to labor migration are generally overstated.
2. Taxation of natural resources: They are sources of location specific rent. Taxing such rent is efficient and avoids the economic distortions arising from other factors of production.
3. Property Taxes: These are under-utilized in most of the countries. Low income economies specially have room to increase revenue from this source as incomes rise.
Poverty is not merely an economic problem, it is also a social stigma. Class differences lead to dissatisfaction and disharmony. Poverty also compels many to resort to theft and robbery to sustain for necessities.It is the poor who are easily brainwashed by anti-national groups and engage in terrorist activities. Also, to ensure increased levels of awareness and political equality, it is first necessary to achieve economic equatibility because, of what use are rights to an empty stomach?
Brilliant. Every point is well made and potentially all aspects of poverty that require attention have been covered.
ReplyDelete