A common claim in the name of social justice is that money should be transferred from the rich to the poor. The logic behind this claim is that the rich have more than enough money and that transferring money from their wealth to the weaker sections will not harm their financial status
A common claim in the name of social justice is that money should be transferred from the rich to the poor. The logic behind this claim is that the rich have more than enough money and that transferring money from their wealth to the weaker sections will not harm their financial status. In any case, they will remain in their wealth (albeit on a slightly reduced scale) and those in need will improve their economic situation. The accepted means of doing this is through the taxation mechanism, i.e. increasing the volume of taxation collected from them.
What actually happens is that doing justice to one stratum of the population results in not doing justice to another stratum (a zero-sum game). After all, that affluent stratum works hard and invests considerable efforts to earn its capital (a large part of this population makes its money honestly after all). As a response to the high taxation And in order to reduce it the capitalists will either declare a low income and keep double ledgers or take their money and their enterprises outside the borders of the country. The loss to the state is twofold. One loss is in the withdrawal of the funds from the state and the second loss is that special units must be established whose entire occupation is to monitor all those tax evaders and capital smugglers. This means increasing the mechanism, which also costs money, while those workers can contribute their share in the fields others. It is better that the funds remain in Israel and be invested in the establishment of new factories, thereby opening up additional employment opportunities and the establishment of private welfare funds to support the needy, thus ensuring that these funds are indeed used by the needy properly. The amount of taxation must be determined according to the same limit beyond which the taxpayers begin to think about exemptions and actually carry them out. Two conclusions are required from this and they are:
A. When determining the amount of taxation, one must also think about the long term and not just the near term - what is the potential damage from overcharging.
B. Social justice achieved at the cost of economic distortions is better not done at all. The price is too high.
