The debate over income redistribution is a very old one that raises the passion of many people. By definition, income redistribution means that some people will be (in a sense) made worse off in order to make others better off.

Arguments Against Redistribution

The central argument against the redistribution of income relies on efficiency. Labor, like any resource, is paid its marginal product. Some people have skills and talents that yield a high marginal product, and others do not. This is considered the cruel fate of the marketplace. A person’s marginal product can always be improved by learning a new skill that has a higher marginal revenue product than their current skill. However, in the end, it is the revenue that people bring to firms that determines their compensation. If people were no longer being rewarded for their productivity, there would then be no incentive to get an education or invest in new goods. If the government were to redistribute income, there would be no incentive for people to take dangerous jobs or difficult jobs or even jobs that require more effort than other jobs.

Those who are opposed to income redistribution also see it as unfair taxation. When the government taxes some people and then gives the money to other people, some see this act as the unlawful taking of property. There is also opposition to income redistribution as the wrong means to a good end. Even though income inequality is not a good thing, simply taking money from one end of the income spectrum and giving it to the other is not a solution to the cause of inequality. It is a mask for the symptoms. The key, it is felt, to eliminating income inequality is through long-term solutions. One such proposition is that government should spend money on education and retraining. Lastly, there is opposition to redistribution on the basis that the government is physically incapable of redistributing effectively and efficiently. There are many stories of fraud, waste, and bureaucratic hassles with regard to income redistribution programs.

• Arguments In Favor of Redistribution