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7. (a) Outline two policies a government could consider to reduce income inequality - Leaving Cert Economics - Question 7 - 2018
Question 7
7. (a) Outline two policies a government could consider to reduce income inequality. (i) (ii) (b) Outline one possible challenge for the Irish economy of reduci... show full transcript
Worked Solution & Example Answer:7. (a) Outline two policies a government could consider to reduce income inequality - Leaving Cert Economics - Question 7 - 2018
Step 1
Outline two policies a government could consider to reduce income inequality.
Answer
Policy 1: Increase Welfare Benefits
One policy the government could consider is to increase or maintain welfare benefits. This would provide vital financial support to low-income individuals and families, helping to narrow the income gap by ensuring that those with lower incomes receive adequate resources to meet their basic needs.
Policy 2: Progressive Taxation
Another effective policy is to implement tax changes that make the tax system more progressive. For instance, the government could introduce a wealth tax or adjust income tax rates so that higher earners contribute a larger percentage of their income compared to lower earners. This could help redistribute wealth and reduce income inequality.
Step 2
Outline one possible challenge for the Irish economy of reducing income inequality.
Answer
One significant challenge in reducing income inequality in the Irish economy is the potential resistance from higher-income groups. These individuals and businesses may oppose policies such as higher taxation or increased welfare benefits due to concerns over reduced personal income and potential negative impacts on economic growth. Effective communication and strategies to engage these groups are essential to mitigate pushback and gain broader support for initiatives aimed at reducing income inequality.