Poverty, inequality and redistribution
| English | Español |
|---|---|
| absolute poverty/ˈæbsəluːt ˈpɒvəti/ | pobreza absoluta |
| relative poverty/ˈrelətɪv ˈpɒvəti/ | pobreza relativa |
A decision you can investigate
- Two households can afford food and shelter, but one has much less income than the community norm.
- Poverty and unequal income are related concepts, with different measurements.
Build the explanation
- Absolute poverty 绝对贫困 means insufficient resources to meet basic needs. Relative poverty 相对贫困 means resources well below a society’s usual living standard. Income inequality describes uneven distribution across people or households.
- Reducing poverty can meet basic needs, raise living standards and respond to ethical concerns. Progressive taxes take a larger proportion of higher incomes. Benefits transfer income; education and healthcare can improve future earning capacity and access to work.
Work through the evidence
- Under a fictional tax rule, the first 10000 yuan is untaxed and income above that is taxed at 20%. Income of 20000 pays 2000, an average rate of 10%. Income of 40000 pays 6000, an average rate of 15%.
- A targeted benefit may immediately support food and rent. Training takes longer but can improve employability. Neither works well if eligible households cannot access it.
How much tax is due on income 40000 under the rule?
Only 30000 above the allowance is taxed at 20%.
Test the limits
- A higher tax payment alone does not prove progressivity; compare tax as a percentage of income. Benefits need funding and effective targeting; tax/benefit withdrawal can affect work incentives.
- Education and healthcare reduce barriers but cannot guarantee jobs. State the poverty criterion rather than applying one fictional threshold to every country.
Which measure can provide immediate income support?
A benefit directly transfers resources now.
A tax is progressive whenever a richer person pays a larger cash amount.
Progressivity requires a larger proportion of income, not just a larger payment.
Apply and explain your answer
- Why is the fictional rule progressive?
- The average tax rate rises from 10% to 15% as income rises.
Which distinguishes inequality from absolute poverty?
An unequal distribution can exist even when everyone meets basic needs.
Use the terms precisely
- absolute poverty: Insufficient resources to meet basic needs.
- relative poverty: Resources substantially below a society’s usual living standard.
Match the terms to their meanings.
Each term describes a specific mechanism in this lesson.
Under a fictional tax rule, the first 10000 yuan is untaxed and income above that is taxed at 20%. Income of 20000 pays 2000, an average rate of 10%. Income of 40000 pays 6000, an average rate of 15%. A targeted benefit may immediately support food and rent. Training takes longer but can improve employability. Neither works well if eligible households cannot access it.
A higher tax payment alone does not prove progressivity; compare tax as a percentage of income. Benefits need funding and effective targeting; tax/benefit withdrawal can affect work incentives. Education and healthcare reduce barriers but cannot guarantee jobs. State the poverty criterion rather than applying one fictional threshold to every country.
Absolute poverty means insufficient resources to meet basic needs. Relative poverty means resources well below a society’s usual living standard. Income inequality describes uneven distribution across people or households.