Income redistribution
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INCOME REDISTRIBUTION PowerPoint PPT Presentation


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INCOME REDISTRIBUTION. PROBABLY MOST CONTROVERSIAL OF GOVERNMENT FUNCTIONS TRANSFERRING INCOME AND RESOURCES FROM SOME HOUSEHOLDS TO OTHER HOUSEHOLDS INVOLVES MANY PROGRAMS – TOTALLING OVER $1.5 TRILLION ANNUALLY. THE DEBATE.

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INCOME REDISTRIBUTION

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INCOME REDISTRIBUTION

PROBABLY MOST CONTROVERSIAL OF GOVERNMENT FUNCTIONS

TRANSFERRING INCOME AND RESOURCES FROM SOME HOUSEHOLDS TO OTHER HOUSEHOLDS

INVOLVES MANY PROGRAMS – TOTALLING OVER $1.5 TRILLION ANNUALLY


THE DEBATE

SUPPORTERS: SAY POVERTY IS STILL SIGNIFICANT, AT BETWEEN 15% AND 20%

ALSO SAY INCOME INEQUALITY HAS INCREASED

DETRACTORS SAY PROGRAMS REDUCE “SELF SUFFICIENCY” AND FINANCIAL INDEPENDENCE


MEAN INCOME TRENDS OF U.S. HOUSEHOLDS DIVIDED INTO “FIFTHS” BY INCOME (2009 $)


FAMILY NET WORTH BY PERCENTILE OF INCOME2007 $000’S


Percentage of Households in Income Ranges, 2009 $


RATIO OF MEDIAN BACHELOR’S DEGREE ANNUAL SALARY TO MEDIAN HIGH SCHOOL DEGREE ANNUAL SALARY


HOW MEASURE POVERTY?

ABSOLUTE POVERTY

RELATIVE POVERTY

INCOME VERSUS CONSUMPTION


HOW INCOME IS REDISTRIBUTED

CASH

TANF: TEMPORARY AID TO NEEDY

FAMILIES

EITC: EARNED INCOME TAX CREDIT

NON-CASH (“IN-KIND”)

FOOD STAMPS, NUTRITION

PROGRAMS, MEDICAID

IS ISSUE LACK OF MONEY, OR

SOMETHING ELSE?


ISSUES WITH INCOME REDISTRIBUTION

1. PHASING OUT HELP AS INCOME

RISES – EFFECTIVE “MARGINAL

TAX RATES” CAN BE HIGH

TAXES ON THOSE PROVIDING HELP:

DISINCENTIVES TO WORK?

DOES GOVERNMENT ASSISTANCE

“CROWD OUT” PRIVATE CHARITIES?


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