Economy (income redistribution)
• contrast between rich and poor is unacceptable →
task of the government = ensure social justice through income redistribution policies
• economic benefits =
make the rich pay more → receipts to the poor
→ resources used almost entirely for consumption
→ more consumption after redistribution (=> more production)
The government cannot eliminate inequality through an income redistribution policy, but it can make it smaller.
the government has instruments for redistribution, the most important and most used -> 1) personal income tax and 2) social security
• families earn different incomes →(interest and dividends)
→ (houses and lands)
→ professional income from work
→ other incomes
declaration form on paper or online → after checking, the taxes are calculated
• different tax systems
proportional tax system: every taxpayer pays the same tax rate
progressive tax system: higher taxable income = higher tax rate
→ global progressive: full income at the rate of the highest tax bracket
→ stepped progressive tax system: everyone has the same rate on the same part of their income
PROGRESSIVE TAX SYSTEM = REDISTRIBUTIVE
The social security system consists of the insurance principle and the solidarity principle
Insurance principle: the following matters are covered against payment of contribution
→ social risks
→ malady
→ disability
→ anility
solidarity principle: possible payment to those who need it through a certain contribution
solidarity between → employed and unemployed people
→ young people and the elderly
→ healthy and sick people
→ families with and without children
replacement income = loss of income from work due to unemployment, retirement and disability
additional income = additional costs, raising children, medical expenses, ...
unemployment insurance
retirement
occupational health insurance
family contribution
sickness and disability insurance
occupational accident insurance
yearly holiday
the national social security office is the government agency that collects employee and employer contributions and distributes them among the branches.
• contrast between rich and poor is unacceptable →
task of the government = ensure social justice through income redistribution policies
• economic benefits =
make the rich pay more → receipts to the poor
→ resources used almost entirely for consumption
→ more consumption after redistribution (=> more production)
The government cannot eliminate inequality through an income redistribution policy, but it can make it smaller.
the government has instruments for redistribution, the most important and most used -> 1) personal income tax and 2) social security
• families earn different incomes →(interest and dividends)
→ (houses and lands)
→ professional income from work
→ other incomes
declaration form on paper or online → after checking, the taxes are calculated
• different tax systems
proportional tax system: every taxpayer pays the same tax rate
progressive tax system: higher taxable income = higher tax rate
→ global progressive: full income at the rate of the highest tax bracket
→ stepped progressive tax system: everyone has the same rate on the same part of their income
PROGRESSIVE TAX SYSTEM = REDISTRIBUTIVE
The social security system consists of the insurance principle and the solidarity principle
Insurance principle: the following matters are covered against payment of contribution
→ social risks
→ malady
→ disability
→ anility
solidarity principle: possible payment to those who need it through a certain contribution
solidarity between → employed and unemployed people
→ young people and the elderly
→ healthy and sick people
→ families with and without children
replacement income = loss of income from work due to unemployment, retirement and disability
additional income = additional costs, raising children, medical expenses, ...
unemployment insurance
retirement
occupational health insurance
family contribution
sickness and disability insurance
occupational accident insurance
yearly holiday
the national social security office is the government agency that collects employee and employer contributions and distributes them among the branches.
