Transcript Dr. Shahram Yazdani

Wealth Redistribution Policies
Dr. Shahram Yazdani
Shahid Beheshti University of Medical Sciences
School of Medical Education
Strategic Policy Sessions: 05
“It’s Your money, not the
government’s”
Ronald Reagan
Dr. Shahram Yazdani
Dr. Shahram Yazdani
“As long as there existed a business owning,
class oppression would continue. Private
property is illegal.
Karl Marx
What is an Ideology?
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Generally speaking, it is a value system
through which we perceive, explain and
accept the world.
According to the political theorist Robert
Dahl, all individuals are ideologues in the
sense that we all map out our own
interpretations of what the world is and
how it should be.
Dr. Shahram Yazdani
The Major Components of
Ideologies
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The state of human nature
The role of the individual in society
The role of the state
The sources and limits of political
authority
The preferred economic and social order
Dr. Shahram Yazdani
Ideologies: The Preferred Economic
and Social Order
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Dr. Shahram Yazdani
Ideologies have to deal with the fundamental
question of who controls the wealth in society.
Should wealth be equally shared, or should
some individuals be allowed to possess more
wealth than others?
For communists, private ownership is not
allowed. They are committed to providing an
equitable distribution of wealth
For capitalists, people need to compete with
one another in order to have an incentive for
material gain. Economic and social inequities
are allowed to exist
“The Economy”
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How politics and economics interact, and
how they balance conflicting values of
freedom and equality
Dr. Shahram Yazdani
Components of Political Economy
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Markets – interaction between supply and
demand that functions to allocate resources
 Freely allow individuals to buy, sell, and
trade what they produce for what they will
consume
 Sets values, or “prices” for these goods
and services
Dr. Shahram Yazdani
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Markets arise spontaneously, and are difficult
for the state to control
Components of Political Economy
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Property – ownership of goods and services
 State can choose to play a role in protecting
property rights – the right to sell property
freely, or to not have it taken away
 In LDCs, frequently property exists without
a fundamental protection of property
rights, due to the state’s inability to monitor
instances of fraud
Dr. Shahram Yazdani
Components of Political Economy
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Dr. Shahram Yazdani
Public Goods – goods provided and/or secured
by the state
 Examples (universal): Roads, lighthouses,
the military
 Examples (in some cases)
 Health care in Britain, Canada
 Oil in Nigeria and Saudi Arabia
 Most businesses in Cuba
Components of Political Economy
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Taxation
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Means to provide for public goods and social
expenditures
Subject of political battles, determined
partially by ideology toward the role of the
state
Dr. Shahram Yazdani
Components of Political Economy
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Social Expenditures
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Dr. Shahram Yazdani
Commonly called “The Welfare State” –
redistribution of wealth through government
taxing some, and paying others
Typically provided to the elderly, the
unemployed, the poor, and the disabled
Often a subject of political battle, due to the
question of who benefits from expenditures
Components of Political Economy
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Money, Inflation, and Unemployment
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States create and manage the money supply
through a central bank
Creation of too much money in effort to stimulate the
economy and reduce unemployment can cause
inflation
Slowing the growth of money to control inflation can
slow economic growth and cause unemployment to
rise
Dr. Shahram Yazdani
Components of Political Economy
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Regulation – rules or orders to set the
boundaries of given procedures
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States can ban production or sale of goods,
set safety requirements, outlaw monopoly
control, etc.
Trade – access to goods and services
from foreign states
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Dr. Shahram Yazdani
States can allow open trade, or restrict it
through tariffs, quotas, and other non-tariff
barriers
Tax Rates as % of GDP (2008)
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Dr. Shahram Yazdani
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Sweden: 54.2 %
Denmark: 48.8 %
Finland: 46.9 %
Belgium: 45.6 %
France: 45.3 %
Austria: 43.7 %
Italy: 42 %
Netherlands: 41.4 %
Norway: 40.3 %
Germany: 37.9 %
United Kingdom: 37.4 %
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Russia: 36.9 %
Canada: 35.8 %
Switzerland: 35.7 %
New Zealand: 35.1 %
Australia: 31.5 %
Ireland: 31.1 %
United States: 29.6 %
Japan: 27.1 %
China: 17%
Mexico: 9.7%
Iran: 7.3%
Nigeria: 6.1%
Gini Coefficient for the 6 Countries
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Dr. Shahram Yazdani
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Sweden – 23.1
Germany – 28.3
U.S. – 40.8
China – 44.7
United Kingdom – 36.0
Russia – 31.0
Mexico – 54.6
Iran – 43.0
Nigeria – 50.6
Success is one percent inspiration and ninetynine percent perspiration
Priori
+ Experience
= Posteriori
Where I was born
Dr. Shahram Yazdani
Who are my parents
How I was developed
What is my IQ
+
Inspiration
Perspiration
=
Who am I now
What have I now
Wealth Redistribution
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Revenue Model
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Logarithmic (Regressive)
Full Range Increasing (Proportional)
Increasing (Proportional) with Threshold
Exponential (Progressive)
Payback Model
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Dr. Shahram Yazdani
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Full Range Flat Rate
Flat Rate with Threshold
Full Range Decreasing
Decreasing with Threshold
Inverse Exponential
Income Redistributive Policies
Full-Range
Flat Rate
Flat Rate
with Threshold
Full-Range
Decreasing
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Increasing
with Threshold
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Exponential
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Full Range
Increasing
Decreasing
with Threshold
Inverse
Exponential
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
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Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Income Redistributive Policies
 
Tax Reduced
Allowance Added Income
Income
Thank You !
Any Question ?