Property Rights and Income Inequality

Abstract: The purpose of this paper is to analyze the impact that property rights exert on income inequality. It has been widely argued that income inequality is one of the catalysts of poverty and economic disparities between the haves and the have-nots. Moreover, advocates in favor of economic planning and government intervention have contended that one of the methods to reduce income inequality is for the state to play a redistributive role such as imposing a wealth tax, a progressive income tax, or even imposing a minimum wage. Although these measures portray genuine intentions, the overwhelming empirical evidence shows that these well-intended policies generated adversarial results. This paper argues that income inequality is a normal, natural, and mandatory characteristic for the economic development of civil society. This paper intends to demonstrate that income inequality is not inherently a predicament for the economic evolution of the citizenry but a necessary condition to ensure their growth. To demonstrate the validity of arguments, we intended to use statistical methods as illustrative and communicative tools of analysis rather than predictive tools