Chile´s wealth distribution

Looking at the way people surround themselves with aggressive sharp fences, seeing all the 'Privado' signs, and noticing the incredible number of barking guard dogs, reminds us constantly that wealth in Chile isn't fairly distributed. The sound of dogs barking permeates most towns at night and made wild camping on the outskirts of villages very difficult between Santiago and Patagonia. This is the only place in the world where we have seen elevated rubbish platforms on the street to prevent dustbins being tipped over and ransacked by stray dogs.

According to the OECD, the top 10% of earners receive close to 43% of the money, whereas in Norway it's 23% and even in the US it's only 30%. 

Things have been slightly improving over the last 10 years according to this recently published study: www.ecineq.org/ecineq_bari13/FILESxBari13/CR2/p105.pdf. At the moment the top 2% of earners take nearly 20% of the money, although in Chile there is a commonly held belief that: 'only 6 families own 90% of the wealth', something that we have heard several times although not supported by any evidence that we can find.

For average earners the Chile tax burden is an incredible 7% which compares with the highest in the world of 55% in Belgium, 37.5% in Norway and 29% in the US. (Source: OECD) This incredibly low tax burden means that social provisions are very poor and that most services are private. We've met many doctors and dentists originally from Peru or Uruguay who came here because they could make so much more money in Chile than at home. The newest buildings that we see are always hospitals and it is not unusual to find a street with many chemists within a hundred metre stretch. In the Lakes District the people with holiday homes are almost exclusively medical people based on the people that talked to us on our travels. 

This very low tax burden probably exacerbates the already skewed wealth distribution, with richer people able to afford the US style health care, life insurance, school fees and nice houses, which they then protect with big fences and guard dogs, while the rest make do with very poor public schools and a consequent lack of opportunity in later life. We've met many people who have talked about setting up their own schools as an alternative to those locally available.

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