Question

The World View article reports, In poor, developing countries, the richest 10th of the population typically gets 40 to 50 percent of all income. Which of the following is a form of government intervention designed to change the situation?

a) Progressive taxation
b) Laissez-faire
c) Supply-side economics
d) Austerity measures

Answer 1

One form of government intervention designed to address income inequality is progressive taxation.

Step-by-step explanation:

One form of government intervention designed to address income inequality is progressive taxation. Progressive taxation is a tax system in which the rich pay a higher percentage of their income in taxes, rather than a higher absolute amount. This means that as a person's income increases, their tax rate also increases.

For example, let's say there are two people, person A and person B. Person A earns $50,000 per year and Person B earns $500,000 per year. With progressive taxation, Person B would pay a higher tax rate than Person A, even though Person B pays more in taxes overall.

By implementing progressive taxation, governments can redistribute wealth and reduce income inequality by taking income from those with higher incomes and providing income to those with lower incomes.