Taxes can be used to redistribute income to the poor

Taxes can be used to redistribute income to the poor -...

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Taxes can be used to redistribute income to the poor. For example, the U.S. uses a  progressive income tax that takes a larger percentage from higher incomes and a  smaller percentage from lower incomes, meaning that the poor keep a larger  percentage of their income than the rich do (though the amount that the poor take home  is still lower than that of the rich). The government uses the tax money to fund many  different programs, including some that target poverty and inequality.  In-kind Transfers and Housing Subsidies  In-kind transfers give essential goods (or coupons for these essential goods) to the  poor. These are a relatively paternalistic policy option, since the government limits what  goods the poor can obtain with their governmental aid, under the assumption that the  poor may not make the "best" choice if given cash instead of good-specific benefits. 
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This note was uploaded on 12/13/2011 for the course ECO 1320 taught by Professor Staff during the Fall '11 term at Texas State.

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