Income Redistribution And Its Key Pros - 1460 Words

Income Redistribution Income redistribution refers to the concept of transferring income from the wealthy individuals to the less wealthy individuals through social mechanisms such as monetary policies, charity, welfare, land reforms, and taxation among others. Income redistribution affects the entire economy rather than selected groups of individuals. The concept of income redistribution emanates from the existence of income inequalities within an economy. Income inequality depicts a gap between the highest and the lowest income earners in an economy (Tullock 13). Income inequality is sometimes considered appropriate in societies since it acts as an incentive in free market economies, whereby in the absence of inequality, elements of economic stagnation and lack of enterprise would emerge. Conversely, income inequality is criticized on the basis of introducing contributing towards the development of key problems in the society, including progression of poverty levels. This paper seeks to explore the conc ept of income redistribution and its key pros and cons. Arguments for Income Inequalities Although the majority support income redistribution, others argue that income inequalities are necessary for several reasons. First, income inequalities encourage a spirit of hard work, whereby when someone works hard and he or she is paid a higher wage, he or she is encouraged to keep working hard, hence increasing productivity and higher national output, which benefits the entireShow MoreRelatedThe Political Positions Of The Democratic And Republican Parties Essay1620 Words   |  7 Pagesimitated influence of government and dominant foreign policy. Republican are on the right end of the political spectrum while democrats are on the left. The far right generally is pro religious, anti-bureaucracy, pro-military, pro-business and pro personal responsibility. 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