Income Redistribution

In politics, income redistribution refers to the concept that governments should encourage the movement of wealth from richer individuals to poorer individuals. This idea is usually embraced by liberalss but rejected by conservatives.

In economics, income redistribution occurs in unregulated markets when the altruistic feelings of actors induce them to make private transfers to others. In certain cases, private transfers alone are not enough to achieve an optimal distribution of income - for instance, if the transfers devolve to a coordination game of each person giving just the right amount to the "deserving" recepients. Then there arises an economic justification for state-run income transfers through the taxation and welfare systems.