Wealth And Income

Question 1

Define wealth…

Answer 1

A stock or real or financial assets such as the ownership of property, shares and savings.

Question 2

What are the issues when defining wealth and income?

Answer 2

Pensions and property as it is hard to convert to cash as we all need somewhere to live. You can be wealthy but cash poor.

Question 3

What is the solution to defining wealth and income?

Answer 3

Marketable wealth, anything that can be sold.

Question 4

The richest 10% own how much % of all wealth?

Answer 4

44%

Question 5

The richest 1% own the same as the poorest…

Answer 5

55%

Question 6

44% and 55% who came up with these figures?

Answer 6

Equality Trust 2015 based on ONS 2014

Question 7

Define income…

Answer 7

A flow of money consisting of earned (salaries and wages) and unearned income (interest, rent, dividends, social security payments).

Question 8

Define disposable income…

Answer 8

The amount left after taxes

Question 9

Define discretionary income…

Answer 9

The amount left after essentials have been brought.

Question 10

Define household income…

Answer 10

The combined income of a household

Question 11

What are the 3 ways of measuring wealth?

Answer 11

Inheritance tax, surveys and tax brackets.

Question 12

Describe inheritance tax and its limitations In measuring wealth…

Answer 12

40% above £325,000. Avoidance £3000 gifts, £5000 children’s marriage.

Question 13

What are the limitations of using surveys when measuring wealth?

Answer 13

Low response rates, Unknown, privacy, validity.

Question 14

What are the limitations of using tax brackets when measuring wealth?

Answer 14

Off shore accounts, lie about salarys.

Question 15

Sikka 2005 estimates

Answer 15

The U.K. Looses £25bil each year due to tax evasion. Self employment sale rides are X1.5 larger than reported.

Question 16

In 1970 the 10th from the top earned….

Answer 16

X2.5 more than 10th from the bottom, in 2010 it was x3.8.

Question 17

How do you become wealthy?

Answer 17

Inheritance, entrepreneurship, chance and saving.

Question 18

Which is more evenly distributed, income of wealth?

Answer 18

Income

Question 19

In 2013 the top 10% earned…

Answer 19

X10 more than the bottom 10%

Question 20

The gini coefficient has risen from…

Answer 20

0.24 in 1977 to 0.34 in 2012

Question 21

How is wealth redistributed?

Answer 21

Direct taxes - progressive
Indirect taxes - regressive
Cash benefits
Benefits in kind (NHS,education)

Question 22

How much does redistribution reduce inequality?

Answer 22

2/3rds

Question 23

What is the intersectionality of income distribution?

Answer 23

Gender, ethnicity, age, disability and occupational class

Question 24

Fact about income distribution and gender?

Answer 24

Men earn 9% more per hour than women

Question 25

Fact about income distribution and ethnicity?

Answer 25

Discrimination/ education

Question 26

Fact about income distribution and age?

Answer 26

30-65 higher wages

Question 27

What are the 2 reasons to explain the growth in economic inequality?

Answer 27

Labour market polarised between secure well paid jobs and insecure poor paid jobs. Family changes (single parent families).

Question 28

What are the 6 things Kersley and Shaheen 2014 used to explain the growth in economic inequality...

Answer 28

Globalisation, technology, financialisation, government redistribution, political capture, trade unions.

Question 29

How does globalisation explain the growth in economic inequality?

Answer 29

Outsourcing under wins low skilled workers, skill intensive jobs are concentrated in the Uk, more opportunities for the rich.

Question 30

How does technology explain the growth in economic inequality?

Answer 30

Computerisation/process innovations put unskilled workers out of jobs high skilled workers paid to invent/man the equipment.

Question 31

How does financialisation explain the growth in economic inequality?

Answer 31

Organisations make money from money, wages earn less than investors

Question 32

How does government redistribution explain the growth in economic inequality?

Answer 32

Benefits decreased (austerity programmes) tax decreased eg top bracket 85% in 1980 to 45% now (income).

Question 33

How does political capture explain the growth in economic inequality?

Answer 33

Corporate capture in democracy, extend policies that protect their interests, low paid disillusioned by policies and stop voting, government don't represent them.

Question 34

How do trade unions explain the growth in economic inequality?

Answer 34

45% on 1980, 25% today. CEOs can exploit workers not part of an Union to maximise profit.

Question 35

What are 2 additional reasons for economic inequality...

Answer 35

The government has failed to close tax loopholes, inflation within property market means the rich get richer and the poor can't afford to even get a property.

Question 36

Pensions are part of the?

Answer 36

Contributionary principle.