redistribution policies (9)

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9 Terms

1
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How does progressive taxation reduce inequality?
Higher-income earners pay a larger proportion of income in tax.
2
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What are transfer payments?
Cash payments made by government where no good or service is exchanged.
3
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How do transfer payments reduce inequality?
They increase the incomes of lower-income households.
4
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What are social transfers in kind (STIKs)?
Government-provided services that reduce household expenses.
5
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Give examples of social transfers in kind.
Public education, healthcare and public housing.
6
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How are transfer payments different from social transfers in kind?
Transfer payments provide cash while social transfers in kind provide services.
7
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Why do social transfers in kind reduce inequality?
They reduce living costs and benefit lower-income households most.
8
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How do taxes and transfers affect disposable income distribution?
They make income more evenly distributed across society.
9
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What are the main ways government redistributes income?
Progressive taxation, transfer payments and social transfers in kind.