Sovereign wealth fund fails to solve redistribution and spurs oil and natural gas investments that hurt the environment
Nolan Downey 22, Staff Attorney for the Legal Impact Network at the Shriver Center on Poverty Law. Economic Security Project. April 13. "Guaranteed Income: States Lead the Way in Reimagining the Social Safety Net” https://economicsecurityproject.org/resource/states-lead/ //pipk
It is worth noting that the sovereign wealth fund model may weaken a publicly-funded guaranteed income program’s potential to be redistributive – shrinking income inequality by raising tax burdens on wealthy individuals and corporations and distributing it to those at the bottom of the income hierarchy. Investing large sums of public money in sovereign wealth funds could undermine this objective if the best strategy for growing the fund is investment in large corporations, “blue-chip-stocks”, and private equity firms.51 Such an approach could perpetuate the funneling of money upward on the income spectrum, and further harm the environment by encouraging investment in unsustainable extractive industries like oil and natural gas.