Unequality among citizens has long been seen as a problem of developing countries and totalitarian regimes. However, it is not uncommon these days to see the news of developed countries’ worsening gini coefficients, an index showing inequality among members of public. In my opinion, this plague is caused by the automation, boosted by the artificial intelligence revolution, and unfair taxation practices. The most straightforward solution to the problem lies in resolving the taxation by levying new taxes on automation and high-income individuals.
The automation is seen as a blessing due to its ability to improve efficiency, being able to do more with same amount of resources, however, it is also a curse due to the same reason it is endorsed, the ability to decrease the human resource requirement which in turn leads to unemployment and increased pay gap. Until recently, the automation’s effect on the workforce and unequality wes not significant despite the fact that it has been around since the industrial revolution. But the rise in the AI’s capability made many white and blue collar positions redundant. This meant lay-offs and decrease in wages for employees while it meant higher profit for the employers hence feeding unequality.
Another source of the widening gap is the taxation practices that protect the rich and feed on the middle and low income groups. In most of the world, the rich pays less tax than others. The governments either due to their incompetence or corruption let them get away with their high earnings without proper taxation. On the other hand the rest has the burden to cover the enormous state budgets with their limited income already slashed by the indirect taxes. As a result, the rich is able to save more and the inequality increases.
The most basic and effective solution is to reform the taxation process. It is vital to apply new taxes to the companies that utilises automation causing lay-offs. This way the collected tax can be distributed to the effected people. It is also paramount to increase taxation on the wealthy and enforce it. This way the tax burden on the poor will lessen and the inequality will decrease.
To summarize, the automation, fueled by the artificial intelligence, and wrong taxation practices favoring the rich are the main causes for the increasing inequality around the world. The solution is through reforming the taxation by levying new taxes on the automation and the rich.