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A taxation 4 iss 225 power authority exchange poverty

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A. Taxation
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4 ISS 225 Power, Authority, Exchange Poverty Progressive tax takes a bigger bite from the incomes of the rich than the poor, income tax. (Make the poor better off and the rich worse off) Proportional tax takes the same share from everyone, rich and poor. (Have no net effect on income) Regressive tax takes a higher percentage from the lower income levels than from the well to do. (Make the rich richer and the poor poorer) Taxes are rarely overtly regressive, but some taxes are regressive in effect, such as state sales taxes. The best evidence indicates that the overall incidences of taxes in America are proportional. Regressive state and local taxes are counterbalanced by more progressive federal taxes so they really don’t affect income distribution. At the national level, the wealthy pay for a good deal of our public policies. B. Government Expenditures Government can affect the income a citizen receives by the simple act of writing a check or providing an in-kind payment. Billions of government checks are written each year, mostly Social Security. In-kind payments are something with cash value that is not cash itself (food stamps, low-interest loans for college). These together are all called transfer payments. Many are better off after these transfers, especially elderly due to Social Security and Medicare. But have they made incomes more equal? There is little evidence that transfer programs have significantly redistributed income in America or reduced income inequality. A study on the effect of government expenditures in various categories on individual incomes looking at three points in time concluded that government spending had done little to make incomes more equal. There is no widespread approval of income redistribution aimed at reducing inequality. Americans tend to favor equal opportunity over equal outcomes and reject redistributional policies that would substantially reduce income inequality by government action. C. Social Welfare Programs 1. Current Programs These are the programs, which have guided our social welfare for about 60 years until 1996. Two types of social welfare programs: Social Insurance Programs:
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5 ISS 225 Power, Authority, Exchange Poverty 1. Old Age, Survivors, and Disability Insurance (Social Security) This consists of monthly payments to retired or disabled people and to surviving members of their families. Paid by a payroll tax on employees and employers. 2. Medicare Part A: Federal government pays for part of the cost of hospital care for retired and disabled people. Part B: Voluntary program of medical insurance. 3. Unemployment Insurance Weekly payments to workers who have been laid off and cannot find work. Paid for by taxes on employers. Public Assistance Programs: 1. Medicaid Provides medical and hospital aid to the poor through federally assisted state health programs.
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