ECO-2013 Study Guide - Quiz Guide: Earned Income Tax Credit
Document Summary
Modern societies try to reduce poverty because the poverty line continues to get higher faster than the cost of living. Compared to the 1960s, the people who are characterized as poor now are better off. There are a few reasons why the government won"t pass a law requiring everybody to have the same income. The government spent a lot of money on in-kind transfers, including food stamps, All of that would need to be forgotten and thrown away. Rich people would definitely not benefit from the same income policy. There would be no social class and the poor would be the only people benefited. The rules of the game are the institutions that make up an economy (laws/contracts/etc. The initial wealth of society is gathered by the ruling class, who then create the rules of the game in order to keep themselves rich and the poor poor. Free food raises the true incomes of recipients the most in my opinion.