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

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

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

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


Family net worth by percentile of income 2007 000 s

FAMILY NET WORTH BY PERCENTILE OF INCOME2007 $000’S


Percentage of households in income ranges 2009

Percentage of Households in Income Ranges, 2009 $


Ratio of median bachelor s degree annual salary to median high school degree annual salary

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


How measure poverty

HOW MEASURE POVERTY?

ABSOLUTE POVERTY

RELATIVE POVERTY

INCOME VERSUS CONSUMPTION


How income is redistributed

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

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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