Question

Can someone pls answer the question below and elaborate? I'm confused on this question.

"how do entitlement programs influence the rate at which income inequality and poverty trends change?"

Answer 1

Introduction:

Entitlement Programs of the federal government include Medicaid, Medicare, Social Security, Unemployment and Welfare Programs. Entitlement programs are rights granted to citizens and certain non-citizens by federal law. Entitlement programs can be broken into non-contributory and contributory programs. Non-contributory means the program benefits are available to participants without regard to taxes or any other contribution to the federal government.     Welfare programs such as SNAP (food stamps) or pell grants are an example of this kind of entitlement. Contributory programs pay benefits to participants who have paid into the programs.   The Social Security Retirement Program is an example of a contributory program. Payroll taxes are paid into the program during a person’s working years and benefits are paid out monthly during retirement years based on a formula driven on total contributions made to the program.

Measures to decrease the inequality and poverty :

effective income tax:

percentage of total taxes paid divided by total income

estate tax:

a tax imposed on the value of an inheritance

_income:

a flow of money received, often measured on a monthly or an annual basis

progressive tax system:

a tax system in which the rich pay a higher percentage of their income in taxes, rather than a higher absolute amount

redistribution: taking income from those with higher incomes and providing income to those with lower incomes

wealth: the sum of the value of all assets, including money in bank accounts, financial investments, a pension fund, and the value of a home