Question

What are 2 examples of self-interested reasons that a top earner might favor policies to redistribute income?

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Answer 1

Income redistribution is basically an economic phenomenon that aims to bring at par the distribution of income among the poeple of the society by transffering income from the high income group to the low income group either through direct transfers or through indirect transfers.

2 examples of self-interested reasons that a top earner might favor policies to redistribute income are:

1) By not undertaking the process of redistribution, the government is basically trying to help the poor section of the society in ways which are not so efficient as compared to ways undertaken under income redistribution process. The government may be doing this by adopting some kind of price control policy or a implementing some minimum wage law. This would in inturn lead to fall in the economic surplus of the economy. Thus, in this case favoring income redistribution becomes important.

2) Other kind of income transfers that are preferred by the taxpayers of the country, be it at any income level, are income transfers that are made through public job porgrammes. The reason behind this could be that these types of income transfers lead to addition to the production of goods and services in the economy.