5 redistribution of income
Definition: Studies the shares of national income that go to different factors of production (land, labour, capital, and enterprise) and different groups in society (rich, middle class, poor).
Debt traps: High interest loans keep poor households stuck in poverty as loan repayments consume the majority of their income.
Alleviates human suffering: Poverty is associated with high rates of diseases, malnutrition, starvation, and death. Reducing poverty improves health, well-being, and quality of life.
Income inequality: Difference in income that exists between different groups in society (rich, middle class, poor). Reducing poverty promotes economic growth, enables investment in education and skill development, and drives innovation and growth while creating new markets and demands.
Lack of education and skills: Lack of education and vocational skills lead to unemployment or low-wage work, which decreases economic opportunities.
Economic and social inequality: Discrimination, prejudice, and lack of capital prevent groups such as minorities, women, disabled, and rural populations from upward economic mobility.
Benefit payments: Helps redistribute income to the poor through the welfare system.
Government corruption: Corruption siphons money away from public services and social programs meant to help the low-class population and the homeless.
Progressive taxation system: Tax rate decreases as the taxable amount increases. Those with higher incomes pay a higher percentage of their income in tax.
Regressive taxation: Tax rate decreases as the amount subject to taxation increases, and the burden falls relatively on those with lower incomes.
Effective policies and tackling corruption: Good governance and reforms are necessary to implement effective policies and tackle corruption, which can help alleviate poverty and redistribute income.
Definition: Studies the shares of national income that go to different factors of production (land, labour, capital, and enterprise) and different groups in society (rich, middle class, poor).
Debt traps: High interest loans keep poor households stuck in poverty as loan repayments consume the majority of their income.
Alleviates human suffering: Poverty is associated with high rates of diseases, malnutrition, starvation, and death. Reducing poverty improves health, well-being, and quality of life.
Income inequality: Difference in income that exists between different groups in society (rich, middle class, poor). Reducing poverty promotes economic growth, enables investment in education and skill development, and drives innovation and growth while creating new markets and demands.
Lack of education and skills: Lack of education and vocational skills lead to unemployment or low-wage work, which decreases economic opportunities.
Economic and social inequality: Discrimination, prejudice, and lack of capital prevent groups such as minorities, women, disabled, and rural populations from upward economic mobility.
Benefit payments: Helps redistribute income to the poor through the welfare system.
Government corruption: Corruption siphons money away from public services and social programs meant to help the low-class population and the homeless.
Progressive taxation system: Tax rate decreases as the taxable amount increases. Those with higher incomes pay a higher percentage of their income in tax.
Regressive taxation: Tax rate decreases as the amount subject to taxation increases, and the burden falls relatively on those with lower incomes.
Effective policies and tackling corruption: Good governance and reforms are necessary to implement effective policies and tackle corruption, which can help alleviate poverty and redistribute income.
