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Question 10
Outline and explain two ways in which government policies have affected the distribution of income in the UK.
Step 1
Answer
Government policies that have aimed to stop or reduce welfare benefits can significantly impact income distribution. For instance, austerity measures introduced in recent years have led to cuts in social security benefits. As a result, many low-income families may find themselves with less financial support, which increases inequality. This has been evident in areas where there has been a reliance on these benefits for basic needs, leading to a rise in poverty levels among vulnerable groups.
Step 2
Answer
Another way government policies have affected income distribution is through taxation. Changes to tax policies, such as cuts in higher income tax rates or corporations' tax reductions, tend to benefit wealthier individuals and corporations while potentially increasing the tax burden on lower-income groups. This can exacerbate income inequality, as wealth becomes concentrated among those who can take advantage of these tax benefits, leaving lower-income earners with a comparatively lower net income.
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