Question

What are some reasons for income inequality? What can governments do to erode the degree of income inequality in Canada? What options can governments choice from related to taxation? What type of tax is likely to help those at the bottom end of the income scale most? Which one is least likely to assist the poorest members of society? Explain fully.

Answer 1

Income inequality has become a global problem today. Where this problem was found less in some developed countries, today this problem is also going on. The main reasons for income inequality are - 1. Lack of technical knowledge among the people.

2. The unemployment rate is continuously increasing due to which income inequality is increasing.

3. Due to continuous increase in corruption, inequality is increasing due to lack of proper jobs for the right people, which results in income inequality.

4. Lack of public awareness that does not yield proper benefits. 5. Increasing inequality due to gender discrimination, cast discrimination, color discrimination is also a reason for income inequality.

Some are options should do Government to overcome inequality in Canada-

1. Government should make a policy who make balance between workers and employers power. that seperation of power will definitely work to overcome income inequality in Canada.

2. Labour market is main root of the income inequality in canada, that's why richer become more richer and poor becoming mor poor so government should analysis the problem of the labours and try to sort the problem.

3. Canadian government should focus on the middle class families and make policies according to them.

Government options related to taxation

The government should follow such policies that use maximum revenue on education, health and employment sector because this sector will provide financial help to the rich as well as the poor, which will reduce income inequality.,

The government should increase the tax rate on expensive items because this tax system will increase the revenue of the state and will spend that money for the welfare of the poor, which will reduce income inequality.

The small scale industries of the country should give maximum exemption in tax rate, which will give them incentive and they will earn more profit.

People below the poverty line should be given special exemption in tax rate so that they can do their business or maintenance properly which will bring many benefits to the society in future.Also, many policies like poverty alleviation program should be implemented and they should be supported in maximum quantity, which will develop their physical and mental capacity..

To give special exemption in tax to poor families, the government should make instructions for banks so that they can contribute to the country's economy.