Difference between revisions of "Income Redistribution"

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'''Income redistribution''' is the act or government policy of transferring [[wealth]] from one group of citizens to another.   
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'''Income redistribution''' is the act or government policy of transferring [[income]] from one group of citizens to another.  It is different than [[wealth redistribution]], in which property already owned by citizens is taken and given to others.  It can be voluntary, as in the case of [[charity]] or the [[Early Christian Church]].  It can also be compulsary, as in the case of the [[welfare state]], and [[progressive taxation]].  This article focuses on the latter.
  
Many conservatives view compulsory redistribution as an unjust expropriation of property rights.
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'''Conservative view''':  Many conservatives view compulsory income redistribution as an unjust expropriation of property rights, premised on the belief that property rights are of primary importance, and that equality of income is of secondary or no importance.  Economic growth, they argue, requires the protection of property rights in order to give citizens an incentive to build wealth.  As Milton Friedman argued, the slogan "From each according to his ability, to each according to his need" turns ability into a liability and need into an asset.  They argue that while the maintenance of property rights does cause income inequality, it also causes greater wealth creation in all segments of society.
  
[[Liberal]]s generally support income redistribution based on their belief that individual charitable giving cannot be relied upon and tend to advocate some degree of compulsary redistribution of resources as necessary.  
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'''Liberal view''':  [[Liberal]]s generally support compulsary income redistribution from richer individuals to poorer individuals, based on their belief that income inequalities are injust and individual charitable giving cannot be relied upon to equalize incomes, so that some degree of compulsary redistribution of income is necessary. They argue that income disparity leads to unequal opportunity, social problems among the poor, and wasteful living among the rich.  They also argue that (due to the law of diminishing returns) the utility of $1 to a poor man is much higher than the utility of $1 to a rich man, so that redistribution increases the utility of wealth.
 
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Examples of government programs performing compulsory income redistribution include [[welfare]] and [[progressive taxation]].
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[[Category:Economics]]
 
[[Category:Economics]]

Revision as of 20:48, 19 August 2007

Income redistribution is the act or government policy of transferring income from one group of citizens to another. It is different than wealth redistribution, in which property already owned by citizens is taken and given to others. It can be voluntary, as in the case of charity or the Early Christian Church. It can also be compulsary, as in the case of the welfare state, and progressive taxation. This article focuses on the latter.

Conservative view: Many conservatives view compulsory income redistribution as an unjust expropriation of property rights, premised on the belief that property rights are of primary importance, and that equality of income is of secondary or no importance. Economic growth, they argue, requires the protection of property rights in order to give citizens an incentive to build wealth. As Milton Friedman argued, the slogan "From each according to his ability, to each according to his need" turns ability into a liability and need into an asset. They argue that while the maintenance of property rights does cause income inequality, it also causes greater wealth creation in all segments of society.

Liberal view: Liberals generally support compulsary income redistribution from richer individuals to poorer individuals, based on their belief that income inequalities are injust and individual charitable giving cannot be relied upon to equalize incomes, so that some degree of compulsary redistribution of income is necessary. They argue that income disparity leads to unequal opportunity, social problems among the poor, and wasteful living among the rich. They also argue that (due to the law of diminishing returns) the utility of $1 to a poor man is much higher than the utility of $1 to a rich man, so that redistribution increases the utility of wealth.