Question

Make a case for or against government policy to reduce income equality. Keep in mind that government policy could be directed toward improving work skills and earning potential or it could be directed at redistributing work income through taxes or subsidies.

Answer 1

to reduce income equality means widening the gap between rich and poor. to do so government can employ the fiscal policy and widen the gapbetween rich and poor. first of all the indirect tax is regressive in nature and direct tax is progressive because direct tax posses more burden on the rich and indirect tax posses more burden on the poor. so to widen the gap between rich and poor government can increase the indirect taxes on goods and services and reduce the direct taxation. this way the richer will stay rich and the poorer will be more poor. this way income equality will be reduced.