Published on March 18, 2009
Redistribution of Income What does it mean? Why does the Government get involved? How does the Government get involved?
Redistribution of Income • Economists generally believe that (if left to its own devices) “the market” will produce the most efﬁcient economic outcomes • In the case of the distribution of income this is not always correct • E.g. widening of income inequality in Australia in recent decades
Re-Distribution of Income 50 45 40 % of total 35 Private Income 30 Taxes 25 Benefits 20 Final Income 15 10 5 0 Lowest Second Third Fourth Highest 20% 20% Quintile
Taxation • Tax plays an important role in the distribution of income. Some deﬁnitions are below: • Tax Base: All of the items which are taxed (income, wealth, consumption) • Average Rate of Tax (ART): Proportion of total income earned that is payed in the form of tax • Marginal Rate of Tax (MRT): The proportion of any increase in income that it paid in tax
Progressive, Regressive, Proportional • Progressive tax: Higher income earners will pay a higher proportion of their income as tax • Regressive tax: Higher income earners pay a lower proportion of their total income as tax • Proportional: All income earners pay the same proportion of their income as tax
Calculating personal income tax payable • Use the tax table in Mr Shirlaw’s text (pg. 222) to calculate the income tax payable by a person earning: • $67,000 per annum • $4,600 per annum • $136,000 per annum
Social welfare payments • The Federal Government redistributes its taxation revenue to low income earners via Social Welfare Payments • These payments account for > 40% of Government expenditure • e.g. unemployment beneﬁts, family beneﬁts, pensions • Aged pension is the largest area of social welfare payments (will this continue?)
Redistribution of income and redistribution of wealth are respectively the transfer of income and of wealth (including physical property) from some ...
Most people, of course, are certain that the government helps the poor by transferring income to them. Almost without exception academic studies and ...
Income redistribution is a practice designed to level incomes across a society by transferring some of the income from rich people...
If income redistribution makes society better off, why do we stop before completely equalizing everybody’s income; once you get started, why ...
noun 1. a distribution performed again or anew. 2. Economics. the theory, policy, or practice of lessening or reducing inequalities in income through such ...
Income redistribution can be either the act of an individual's voluntary charitable giving or government mandated compulsory transfer of assets ...
Übersetzung für redistribution im Englisch-Deutsch-Wörterbuch dict.cc. ... econ. pol. income redistribution: ... redistribution procedure redistributive
Global redistribution of income (English) Abstract. The actual distribution of world income across countries is extremely unequal, much higher than the ...
These transfers are commonly referred to as government redistribution programs, ... It leaves out all the programs that transfer income away from the poor.