15 Apr 2022


Income Redistribution Policies

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Academic level: University

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Currently, every government is trying to find ways of income redistribution in order to improve economic equality. In most countries in the world, especially the developing countries the gap between the rich and the poor appears to be so wide. Income redistribution is mainly aimed at reducing the gap between the rich and the poor in the society. Some of the policies have been put in place in the past, yet the country still experiences a great deal of economic inequality. Some critics have argued out that more income redistributing policies will only widen the gap even more. The United States may need to consider more income redistribution policies. Research has shown that American income and wealth inequality is currently accelerating with the population of the poor also increasing. Studies now show that the top three percent own 54.4% of United States’ wealth. This essay will look at some of the income redistributing policies that the US government needs to consider while also checking to see if more policies should be considered.

Some of the policies have been implemented before to curb the gap between the rich and the poor yet the gap still seems to widen up. Practices such as progressive taxation have been applied. Currently, reports still indicate that economic inequality is increasingly becoming a big menace in the country. Some people say that coming up with more income redistribution policies may not help solve this problem. Even if the income for the rich were reduced, they would still find other ways to maintain their wealth while the poor remain poor. Some critics have argued out that some of the policies would only increase inequality instead of doing the opposite. It is not quite clear how this would actually happen though there seems to be such kind of possibilities. According to their arguments, there simply appears to be no form of benefit in trying to come with policies which require more time and preparation to implement and at the same time prove to be of no help to the situation in the society.

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On the other hand, it appears that The United States require more income redistributing policies in order to curb the increasing trend of income and wealth inequality. Some of the solutions to this issue include increasing the minimum wage, investing in education, making the tax code more progressive and putting an end to residential segregation among others. Research has shown that if only the federal minimum wage were to be increased to 10 dollars, then about 4.7 million Americans would get out of the bondage of poverty. This action would also add about 2 billion dollars to the US' overall income. This policy would not interfere with employment, and at the same time, it would not retard economic development in the country. Children should never suffer from poverty, especially in America, if the government can enforce such reforms. Ending residential segregation may also prove to be an effective way of dealing with inequality. High levels of racial residential segregation in a metropolitan for instance, significantly reduces upward mobility for all the occupants of that particular area.

Investing in education is another policy that would contribute to reducing inequality in the country. This act will also ensure that economic mobility, as well as productivity, would increase. Every child should have access to the facilities and quality of education across the country. A research noted that differences in the early education of kids and the quality of schools which they attend are some of the most critical components that contribute to inequality across generations. The government should then ensure that every school has a considerable amount of facilities and quality teachers in order to ensure each child receives the best form of education. Progressive taxation has been adopted, but more adjustments need to be made to this particular policy. The tax code should be made more progressive to make the richer guys in the country to pay more tax to the government as the poor pay as little as possible. The current data on income show that the tax rates for those at the top have been declining as their wealth and income increase. The government should look at this issue and ensure that the high-income earners are taxed accordingly.


Income redistribution is a big problem that needs to be considered by the government. Research has revealed that the tax for those who earn huge amounts in the country has been decreasing as their incomes rise. The inequality in the society and the gap between the rich and the poor has been noted to be increasing rapidly. There US government has implemented some policies in place in past to cut the gap between the rich in the society and the poor. Some analysts have also argued that implementing some income redistribution policies may still increase inequalities. Economy inequality still presents as a huge problem in the country and more policies of income redistribution must be put in place. Some of these policies include ending residential segregation, making the income tax more progressive, investing in education and increasing the minimum wage among others. It is said that the difference in the quality of education alone contributes significantly to economic inequality across generations. The achievement of income redistribution will impact positively on the American economy as the living status of all people will increase with low costs of living.

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StudyBounty. (2023, September 15). Income Redistribution Policies.


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