Authors libby rittenberg 798

A more fundamental reason for concern about income distribution is that
people care about the welfare of others. People with higher incomes often
have a desire to help people with lower incomes. This preference is
demonstrated in voluntary contributions to charity and in support of
government programs to redistribute income.
A public goods argument can be made for government programs that
redistribute income. Suppose that people of all income levels feel better off
knowing that financial assistance is being provided to the poor and that
they experience this sense of well-being whether or not they are the ones
who provide the assistance. In this case, helping the poor is a public good.
When the poor are better off, other people feel better off; this benefit is
nonexclusive. One could thus argue that leaving private charity to the
marketplace is inefficient and that the government should participate in
income redistribution. Whatever the underlying basis for redistribution, it
certainly occurs. The governments of every country in the world make
some effort to redistribute income.
Programs to redistribute income can be divided into two categories. One
transfers income to poor people; the other transfers income based on
some other criterion. A means-tested transfer payment is one for which
the recipient qualifies on the basis of income; means-tested programs
transfer income from people who have more to people who have less. The
largest means-tested program in the United States is Medicaid, which
provides health care to the poor. Other means-tested programs include
Temporary Assistance to Needy Families (TANF) and food stamps. A nonmeans-tested transfer payment is one for which income is not a qualifying
factor. Social Security, a program that taxes workers and their employers
and transfers this money to retired workers, is the largest non-meansAttributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

798