ECR Distribution of income is the equality of income that is distributed among households in the economy, so that people who are getting paid more, pay more for their taxes and that makes the people who are getting paid less feel better and the government. The government is interested in reducing poverty through redistribution of income so that the poor are not as poor and the rich are not as rich and to redistribute this slowly the percentage of poverty could decrease over time. There are different ways the government redistribute income and reduce poverty, I have already mentioned a method in beginning, through taxes, taxes can be used to redistribute income to the poor, taking more from the rich and taking less from the poor. By taking more from the rich, the government uses tax money to fund many different programs, including some that target poverty and inequality. Another method would be welfare and unemployment benefits, welfare can provide money to people with very low incomes. This is the option that gives the recipients the most leeway when deciding how to use their benefits. Unemployment benefits can give a monetary cushion to workers who are unable to find jobs, and, like welfare, are also in the form of money. One more method would be in-kind transfers and housing subsidies, in-kind transfers can give essential goods, like coupons, to the poor. Housing subsidies give the poor money to obtaining decent housing, since rent and upkeep make up a large portion of spending in lower income families. Some of these methods are effective in achieving equity because most of these methods are actually really helpful to decreasing poverty and have benefits. The tax method is really effective, in this case, we are helping and providing to poverty so that we could encourage the percentage of poverty by giving them enough to start them to finding a way to earn money. The in-kind transfers are somewhat effective as well because since the government limits what goods the poor can get with their governmental aid, under assumption that the poor may not make the “best” choice if given cash instead of good-specific benefits. Welfare and unemployment benefits are effective in most ways because this only gives people money with very low incomes not people in poverty. Unemployment benefits are somewhat effective because it can prevent poverty, by giving people who are unable to find a job a cushion in a form of money just like welfare, but some argue that unemployment benefits provide a deterrent to finding “real work”, since it is easier to stay unemployed and receive benefits. All in all, all of the methods were effective in their own ways because according to statistics from 1960 to 2002 the percentage of poverty in the population have decreased from 22.2% to 12.1% and that the income for a single person and for a family of four has increased. In conclusion that is why government is interested in reducing poverty this way, it is effective in an organized way and has many benefits and has actually helped over the years.
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