final econ1: Social Safety Net, Social Insurance, and Redistributive Taxation

These flashcards cover the key concepts discussed in the lecture on Social Safety Nets, Social Insurance, and Redistributive Taxation, focusing on government roles, tax systems, and their effects on income inequality.

Government Redistribution

The process by which the government redistributes income to reduce inequality and poverty by providing transfers to low-income groups.

Social Safety Net

Government-provided assistance for those in or near poverty, including cash, goods, and services to support low-income families, the elderly, disabled, and children.

Means-Tested Programs

Programs that require beneficiaries to meet certain income or asset criteria to receive assistance, ensuring support goes only to those who truly need it.

In-Kind Benefits

Specific goods or services provided by the government (like food or housing vouchers) instead of cash, aimed at preventing misuse and ensuring essential needs are met.

Social Insurance

Programs providing protection against negative life events for individuals who pay into them, regardless of income level; examples include Social Security and Medicare.

Funding Social Insurance

Social insurance programs are funded through payroll taxes collected from workers and employers, proportional to earnings.

Progressive Tax

A tax system where higher-income individuals pay higher marginal tax rates, used to help redistribute income through funding for social programs.

Capital Gains

Profits from the sale of assets that are often taxed at lower rates than regular income, leading to lower effective taxes for wealthy individuals.

Regressive Tax

A tax that takes a larger percentage of income from low-income earners than from high-income earners, such as sales taxes.

Safety Net and Work Incentives

Means-tested programs may discourage work due to benefit phasing out, while social insurance can encourage work by providing income protection.