Income inequality and its consequences within the framework of social justice

Abstract

The paper deals with important social-political issues of sustainable development. Basing on the case study of income inequality indicators in the EU the paper reveals that there is a close relationship between inequality and unemployment; furthermore it confirms that inequality has a significant impact on migration and GNI per capita. The authors detected the differences in national models of inequality regulation by grouping the countries and highlighting those in which the relationship is most clearly and explicitly manifested. A more detailed analysis of these two groups (17 countries) suggests that the relationship between inequality and GNI actually reproduces the distribution of the countries according to the GNI to tax burden ratio (in 2015 the correlation coefficients are-0.702 and 0.718 respectively). Since there is almost no relationship between inequality and tax rates for public and corporations, apparently, the impact on public performance is formed within the processes of income redistribution. Conversely, based on the country grouping according to income distribution, GNI and tax burden, the authors revealed a pattern: the countries with low income inequality have the highest GNI rates even in case of tax burden which is significantly higher than average European values. Basing on discovered relations between income inequality and other factors, the research demonstrated the importance of the state regulation of distribution processes directed towards achieving positive social and economic consequences.