Description
Discuss the use of taxes as a tool for income distribution
2 page
Explanation & Answer
Attached.
Running head: INCOME DISTRIBUTION
Income Distribution
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INCOME DISTRIBUTION
Introduction
Tax policies play a role in income distribution by focusing on the gap between highincome earners and low-income earners. Income inequalities are measurable by use of tax rates
applied on income levels and tax expenditures to control how the market distributes results to
curb disparities. Taxes, therefore, act as a tool for income distribution through resource
allocation, economic stabilization, and redistribution of incomes among taxpayers.
Resource Allocation
Production patterns in an economy are dependent on the allocation of resources.
Taxation helps in the distribution of resources among regions and industries by application of
different taxing methods. By imposing high taxes, a shift from the high-taxed industries to the
low taxed sectors can be initiated. Tax rebates, on th...
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