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Principles of Economics- Mankiw (5th) 441

Principles of Economics- Mankiw (5th) 441 - CHAPTER 20...

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CHAPTER 20 INCOME INEQUALITY AND POVERTY 453 NEGATIVE INCOME TAX Whenever the government chooses a system to collect taxes, it affects the distribu- tion of income. This is clearly true in the case of a progressive income tax, whereby high-income families pay a larger percentage of their income in taxes than do low- income families. As we discussed in Chapter 12, equity across income groups is an important criterion in the design of a tax system. M ANY ANTIPOVERTY PROGRAMS ARE TAR - geted at poor areas of the country. Econ- omist Edward Glaeser presents the case against this geographic approach. Help Poor People, Not Poor Places B Y E DWARD L. G LAESER President Clinton’s six-city “New Mar- kets” tour earlier this summer signaled a renewed focus on the problems of the poor. But while the president’s concern is appreciated by all of us who care about the islands of poverty in America’s sea of affluence, his proposals are fundamen- tally flawed. They may still help some of
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