Question

Discuss how the distribution of income among various groups of income earners have changed in this country during the past 50 years. In your opinion, do we need to initiate any policy to address the distribution of income? Make sure you provide references to any conclusions you arrive at?

Answer 1

*Answer:

It has been observed that in the past 50 years the distribution of income among various groups of income earners has increased considerably and this inequality has become even more significant. It has been observed that in US the top 10% of households with average income of $200,000 receives 42% of pretax income in the year 1990's.

At the same time the top 1% of households with average income of $800,000 received 15% of all pretax income. Thus it shows that there is high income inequality.

Progressive Taxation is an effective measure to address the distribution of income. As the income of the population grows, they should pay higher level of tax which can be utilized for the upliftment of poor sections of the society and infrastructure development and reduce the income inequality.

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