Assignment #3 Ch. 21
Look on attached paper.
The major causes of income inequality are incentives and efficiency. Income inequality largely rewards to individuals for supplying their talents and resources to the economy. Proponents of income equality falsely assume that there is some fixed amount of output produced and therefore income to be distributed. In reality, the government takes tax and transfer process of high-income individuals and rewards it to low-income individuals. In short terms, taxes are a reduction in the rewards from increased productive effort; redistribution through tax transfers is a reward for diminished effort. The basic argument for income inequality is income inequality is justified because it results from differences in the quantity and quality of labor and other resources supplied by individuals to the economy and it is an unavoidable consequence of maintaining the incentives needed to motivate people to produce output and income year after year. There is also, a difference in inheriting property and inheriting a high IQ and inheriting property. When inheriting property, one can manage the property and make a living out of the property if they use their ability to manage the property right. Inheriting high IQ on the other hand is different because whatever the person chooses to do with their IQ is up to them. Making it big or being wealthy all depends on incentives, luck, and connections.
In my opinion, a nation’s income should be distributed to its members according to their contribution to the production of that total income. If you work hard for something, then you deserve the great rewards that entails with hard work. If a nation’s income were based on the member’s needs, then the income would not be very high. Nobody would work for their income if they were allowed to receive help from the government. In reality, I think there is a mixture of both that makes up the nation’s income. I think society should attempt to equalize economic opportunities rather than income because there are a lot of people out there with great potentials for jobs with their skills. In reality though, a lot of people with these skills do not get the opportunities to get a good paying job due to lack or luck or connections. I don’t think they should equalize equality income because there are many people out there who just feed off of government money all their life and don’t really work for their income. They are synonymous because income equity s how income is distributed fairly among the population and income equality is how people are paid according to their discriminations. Women or minorities do not get paid as much and this falls under income inequality or it’s not income equality. Since income equity shows how income is fairly distributed among the population, then according to the example of women and minorities, income equity is not very fair in their terms. I think income inequality is equitable to certain individuals who cannot afford or able to work can fall under this category. The rest of the qualified population that feed off of the government need to stop being lazy and get up and go get a job.
10. The government’s statisticians determines the poverty rate by establishing minimum income thresholds below which a person or family is “in poverty,” basically determined by family size. The poverty rate falls while the number in poverty rises because the poverty rate is the percentage of the population living in poverty. Poverty rises on the other hand because some people do not make enough and they live in poverty or they do make enough but they have a large household and that income cannot support that household. a) Children