均贫富政策

“丘也闻有国有家者，不患寡而患不均，不患贫而患不安。”

期中考试前最后一次备课，又是一篇策论，献丑了。

"Evaluate government's policies in promoting equity in terms of their positive and negative effects on efficiency in the allocation of resources."

As most personal income is earned through hard work, talents, innovation and taking risks, a progressive taxation system punishes these virtues, resulting in low productive efficiency. As we all know, productivity is the primary prerequisite for long run economic growth. Progressive taxation system slows down economic growth and reduces national income, which is a welfare loss for both the rich and the poor.

Taxation also distracts entrepreneurs from the most profitable projects and encourages them to search for more favorable tax climates instead. A complex taxation system even encourages entrepreneurs to devote their talents to tax evasion behaviors.

Government expenditures on the provision of merit goods and services may be less efficient than the private provision.

Transfer payments within the population improve living standards for the low income group, but it cannot contribute anything more to national income. It also prevents the low income earners from working hard. For example, the unemployed may stop looking for a job since he is satisfied with the unemployment benefit. As a result, he will not accumulate any working experiences or skills, which will further deteriorate his human capital. It is a tragedy both for himself and for the whole economy.

Employment regulations place larger burden on firms, leaving less money for investment. So it is not good for economic growth. The required insurance payments and social security costs contribute to unemployment since firms would hire less workers to save costs.

Minimum wage also increases unemployment by preventing labor market from being cleared.

Subsidies on foodstuff and public transportations means opportunity costs for government and may deteriorate government budget.

Price ceilings on food and rent may lead to shortages of both necessities.

However, these policies can improve equality by transferring income from the rich to the poor, from employers to employees. Improvement in both equality and efficiency is also achieved through investments in human capital (e.g. education and healthcare). Such investments may bring people out of the poverty trap, reduce poverty population, improve productive efficiency and make economic development more sustainable.