7.3 Government policies to alleviate poverty & to influence the distribution of income and wealth

Question 1

What is an example of Government intervention to income redistribution and wage equality?

Answer 1

Inheritance taxation: Rich families can’t keep their entire wealth.

Question 2

UK minimum wage

Answer 2

Ensures workers can access minimum standards of living, preventing exploitation by employers and thus prevents extreme poverty.

Question 3

Progressive tax system

Answer 3

Allows Government raise welfare payment, due to increased tax revenue, but the Laffer curve shows that this may lead to lower tax revenue.