Dr. Shahram Yazdani Wealth Redistribution Policies Shahid Beheshti University of Medical Sciences School of Medical Education Strategic Policy Sessions: 05

Dr. Shahram Yazdani “It’s Your money, not the government’s” Ronald Reagan

Dr. Shahram Yazdani “As long as there existed a business owning, class oppression would continue. Private property is illegal. Karl Marx

Dr. Shahram Yazdani What is an Ideology? 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 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 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

Dr. Shahram Yazdani “The Economy” How politics and economics interact, and how they balance conflicting values of freedom and equality

Dr. Shahram Yazdani Components of Political Economy 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  Markets arise spontaneously, and are difficult for the state to control

Dr. Shahram Yazdani Components of Political Economy 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 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

Dr. Shahram Yazdani Components of Political Economy Taxation  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 Social Expenditures  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

Dr. Shahram Yazdani Components of Political Economy Money, Inflation, and Unemployment  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 Regulation – rules or orders to set the boundaries of given procedures  States can ban production or sale of goods, set safety requirements, outlaw monopoly control, etc. Trade – access to goods and services from foreign states  States can allow open trade, or restrict it through tariffs, quotas, and other non-tariff barriers

Dr. Shahram Yazdani Tax Rates as % of GDP (2008) 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 % 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%

Dr. Shahram Yazdani GDP for the 6 Countries U.S. - $14.26 Trillion China - $4.4 Trillion United Kingdom - $2.67 Trillion Russia - $1.68 Trillion Mexico - $1.09 Trillion Iran - $0.34 Trillion Nigeria - $0.21 Trillion

Dr. Shahram Yazdani GDP per capita (PPP) for the 6 Countries U.S. - $46,859 China - $5,693 United Kingdom - $36,523 Russia - $15,922 Mexico - $14,560 Iran - $11,250 Nigeria - $2,134

Dr. Shahram Yazdani Gini Coefficient for the 6 Countries 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

Dr. Shahram Yazdani HDI Ranking for the 6 Countries U.S. – #8 China – #94 United Kingdom – #12 Russia – #57 Mexico – #53 Iran – #101 Nigeria – #151

Dr. Shahram Yazdani Priori + Experience=Posteriori Success is one percent inspiration and ninety- nine percent perspiration Where I was born Who are my parents Inspiration Perspiration How I was developed What is my IQ Who am I now What have I now + =

Dr. Shahram Yazdani Wealth Redistribution Revenue Model  Logarithmic (Regressive)  Full Range Increasing (Proportional)  Increasing (Proportional) with Threshold  Exponential (Progressive) Payback Model  Full Range Flat Rate  Flat Rate with Threshold  Full Range Decreasing  Decreasing with Threshold  Inverse Exponential

Full-Range Flat Rate with Threshold Full-Range Decreasing with Threshold Full Range Increasing with Threshold Exponential Inverse Exponential Income Redistributive Policies

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 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 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 Tax Reduced Allowance Added Income

Thank You ! Any Question ?