Income Inequality linked with tax redistrubution

In countries with large economies, government action is necessary to limit the gap between the rich and the poor. The article deals with this exact issue of income inequality and links it to redistributive taxation. It reveals that the Netherlands as a country with high equality and known for its big redistributive taxes may however have such equality not because of its taxes, but because incomes there are relatively similar. This is a topic discussed in lecture where income inequalities arise from countries like the US who have high incomes and with more income mobility. They have a low “reciprocal altruism,” or they do not believe that helping the poor will eventually give them any returns; as well as more racial heterogeneity.  Therefore, the inequality increases because the rich dislike redistribution, they see their fortunes as a sign of merit and that the poor are poor because they are lazy. We see that equality can also be attained by progressively taxing the rich to balance things out.

http://www.economist.com/blogs/democracyinamerica/2011/12/inequality-and-taxes?fsrc=rss