When the income distribution gets very skewed, with a small number of people getting a large portion of the income, many politicians and social activists start looking for ways to justly redistribute some of the income so that the poor aren't as poor and the rich aren't as rich. Some of the options that they consider include taxes, in-kind transfers, housing subsidies, welfare, and unemployment benefits. While we won't go into these in detail, we will take a brief look at them and how they are used to redistribute income in a skewed economy. Taxes 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
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progressive income tax, inkind transfers, lower income families.