Answer to Question #126374 in Macroeconomics for Boshungmebe

Question

 Give 15 most important economic effects [good] of forced redistribution?

Answer 1

1.      Help curb externalities from private firms

2.      Acts as a measure to control economic crisis arising from wealth and income inequality

3.      It acts as one of the strategies for poverty reduction.

4.      Forced income distribution puts a check to social problems (mental illness, drug abuse, child conflict, early pregnancies) arising from income inequality.

5.      Has promoted long spells of economic growth due to increased equality as compared to inequality.

6.      Lowers the incentive to commit crime from those in lower income bracket.

7.      Opportunities are created for the less fortunate members of the society

8.      It is a form of government revenue from high tax brackets.

9.      Favors those born from lower social classes in competition

10.  Brings about the capacity of the government to implement social welfares

11.  Stands beneficial to structurally organized groups like those of farmers who receive financial support from funds obtained by from forced distribution.

12.  Puts consumption levels to check for those in low and middle income levels increasing their debts to keep up with consumption of the rich.

13.  It is an easy and straightforward way to follow in taxation mostly for developing economies.

14.  It gives those in lower income brackets better chances to make independent political decisions thus reducing political instability.

15.  It reduces health inequalities as cases of malnutrion and hunger are better handled.