Countries with high inequality and belief in luck often support high taxes and welfare states, which are thought to harm the economy. However, countries with large welfare states and redistribution do not necessarily perform worse economically. This is because welfare programs that require work experience and effort can actually benefit the economy. People also care about relative incomes, leading to unhappiness if others earn more. To address this, governments tax labor to reduce competition. In non-competitive labor markets, increasing tax progression can boost employment. Additionally, countries with large welfare states often implement pro-growth policies.