We all know about the vast sums of money the top 1% earn in the US but what about other countries? A few weeks ago Brian Gaynor in the NZ Herald wrote a piece on this topic. Using the OECD report he showed that the top 1% have a much greater share of taxable income than 30 years previous.
From the table only the Netherlands has expereienced a decline in inequality. The biggest increase being the US – 10%. Most commonwealth countries have experienced increasing inequality – New Zealand’s top 1% earning 9% of total taxable income. Countries that have less of an inequality issue tend to be Scandinavian. The OECD has emphasised that there should be a strong emphasis on reducing inequality as well as promoting growth.
“Rising inequality is one of the major risks to our future prosperity and security. The main challenge facing governments is implementing reforms that get growth back on track, put people to work and reduce the widening income gap.”
It has been suggested that the main problem is that managers of companies have taken control away from the shareholders and are therefore allocating income between executives and non-executive employees.