20.3 Income Redistribution

MyEconLab Concept Video

We’ve described the distribution of income and wealth in the United States and examined the five main sources of economic inequality. Our task in this final section is to study the redistribution of income by government.

How do governments redistribute income? What is the scale of redistribution? Why do we vote for policies that redistribute income? What are the challenges in designing policies that achieve a fair and efficient distribution of income and ­reduction of poverty?

How Governments Redistribute Income

The three main ways in which governments in the United States redistribute ­income are

  • Income taxes

  • Income maintenance programs

  • Subsidized services

Income Taxes

Income taxes may ...

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