The top 20% wealthiest people own four-fifths of the property in the Czech Republic. Credit: KB/BD.

Czech Public Underestimates Wealth Gap, But Favours More Equal Distribution

People in the Czech Republic perceive the wealth gap between the country’s richest and poorest as smaller than it actually is, but they would like to see a more equal distribution of wealth, according to two studies on perceptions of wealth and income inequality.

The results were provided to CTK by the Research Institute of Labour and Social Affairs (RILSA).

Ministers, they say, should ideally earn on average about two-fifths of what they earn today. If recalculated, this would be roughly double the average wage.

Some 1,080 people took part in the research. According to the authors, the findings are representative.

The respondents were asked to divide the total wealth in the Czech Republic from the richest fifth to the poorest fifth. They estimated that the top 20% had less than half of the total property and the poorest fifth about 5%. The ideal distribution, according to the respondents, would be for the richest fifth to have one-third of the wealth and the poorest fifth to have over 10%. Almost three-fifths of the ownership would be held by the middle three-fifths, or the middle class.

In reality, the top 20% own four-fifths of the property in the Czech Republic, and the poorest fifth just 0.2%, the authors said. They argued that the results suggest that people significantly underestimate wealth inequality. There were similar findings in other countries.

According to the study, respondents’ ideas about the ideal distribution did not vary much. The situation was perceived similarly by men and women, people under and over 49 and people with assets below and above half a million crowns.

There were also no major differences between voters and supporters of coalition and opposition parties. Supporters of the five ruling parties, the Civic Democratic Party (ODS), the Christian Democrats (KDU-CSL), TOP 09, Mayors and Independents (STAN) and the Pirates, as well as the opposition ANO and Freedom and Direct Democracy (SPD) parties, had similar views on the ideal division of property.

Voters and supporters of ANO, which is headed by one of the richest people in the Czech Republic, Andrej Babis, would give the smallest share of property to the richest fifth and the largest share to the poorest fifth. SPD supporters expressed similar views. According to the authors, these two groups have the strongest preference for equality.

The second study concerned income. The monthly gross income of a minister was CZK 214,000 and of a member of a bank board approximately CZK 1.25 million. Four-fifths of people estimated a lower amount for the minister, and 99% for the manager.

On average, respondents thought that a cabinet member earned about 82% of the actual amount, and a bank manager 22%. Respondents’ ideal level for the ministers’ pay would be 41% of their current income, and the bank manager 11.5%. A member of the government would thus earn just under CZK 88,000 gross per month, about twice the average wage. A manager from a bank should receive about CZK 143,000, according to the respondents.

The experts then divided the respondents and told some of them the actual income of ministers and managers. People who knew the amounts had a higher distrust of the elites and talked more about the need to reduce inequality. 

According to the authors of the studies, the current tax set-up is instead exacerbating it. They point to the high taxation of labour and indirect taxes, and the low taxation of property and capital income.

Czech Public Underestimates Wealth Gap, But Favours More Equal Distribution
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