Some policy makers suggest there is a tradeoff between greater equality and greater economic efficiency.  But government efforts to tax and transfer discourages productivity for both those that pay the taxes and receive the transfer.  If work is taxed and nonwork is subsidized we should expect more non work.

Even a “sacrifice” of a half percentage point in growth will compound into a substantially smaller economy in twenty years. Many countries who have cut their taxes have found far more than a half point growth per year.

Some of the poorest countries have the most equal distribution of income.  We should seek to increase the absolute wealth of the poorest, not their wealth relative to the wealthiest in that society. Few countries would trade their unequal distribution of wealth for the income equality of Guinea, Mozambique, Tanzania or Ethiopia.

Paraphrased from Income and Wealth by Alan Reynolds

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