Sunday, June 25, 2006

Income Inequality and Corruption

There were several good articles on Income Inequality, and some on Corruption--these focusing on India, in the Papers and on some blogs. Confrontation with the content led this Author to consider the Issues as two Sides of the same Coin. One NYTimes articles discussed how Income Inequality can accelerate due to increasing Wealth allowing for increased lobbying participation, to the End of lobbying Interests gaining a greater share of the Wealth. Corruption, as stated elsewhere, provides the greater danger; as the Poor and Middle Class face corrupt officials with their hand out.

But is Corruption the greater hazard?

Corrupt officials build their own Wealth by charging Appliciants an illegal fee, when they themselves are paid by the Government to provide those Services. Time Out! Government officials in said corrupt nations are paid much less in Salary than Our Government Employees, cognizant that the positions are valuable, due to the ability to generate Income (without Taxation) from Those requiring positional services. All are charged for Services, but Charges are often set by Ability to Pay; corrupt officials desireous of generating the greatest possible Income. Overall Taxes are lower because of the Corruption, there is a fluid on-site determination of finance charges in the bribe; and because of the nature of the payment, there is a degree of decentralization of Wealth, while business transaction Service can be relatively swift with the input of Cash.

Lobbyist political contributions express an observable opposite effect. Contributions will not register with the Bribe-Taker if they are insufficiently large, and all activity directed to Service of the Client needs will be predicated by the amount given. Lobbying funds will not guarrantee Service, the official claiming he must acquire consensus among colleagues, which can often translate into looking for a better Offer. Service lacks assured fulfillment, officialdom will not turn down any Contribution whether he will actively pursue the Service or not, and the entire effort stands useless unless One can outbid the Opposition. Only the Wealthy can participate effectively, and the entirety is a pursuit of centralized Wealth.

Bribe-Giver and Bribe-Taker both face severe Penalty if caught (requiring Public opposition to the Service provision). Corruption does not alter the Tax structure, so both Participants face Taxation if the excess Funds are observed. Political Contributions enjoy Tax immunity, a Policy which is counterproductive to an efficient Tax structure; One should be taxed for the right of preferred political participation and access. Corruption may be evil, but it is an effective system; this known by its longevity. No One in their right minds can consider the Lobbyist system to be effective or beneficial. lgl

1 comment:

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