What are a few methods of redistributing income?

Answer 1

The existing US Federal Tax code is the best example of "redistribution of wealth" (after all, it takes the power of government to take the income of one group and redistribute it to another group). The Federal Income tax is "progressive" in that it taxes higher incomes at a higher rate than lower incomes --- by definition this is redistributive. A "Summary of Federal Individual Income Tax Data for the year 2005" (the most recent data available from the Internal Revenue Service reveal that: Top 1% earned 21.20% of all incomes reported, but paid 39.38% of all income taxes. The top 5% earned 37.75% of all incomes, but paid 59.67% of all income taxes. The top 25% earned 67.52% of all incomes, but paid 85.99% of all income taxes. The top 50% earned 87.17% of all incomes, but paid 96.93% of all income taxes. Source: Internal Revenue Service (as reported on www.taxfoundation.org) Essentially half of the country paid the entire federal tax bill for the other half. We have reached a "tipping point" where people paying no income tax have the electoral power to elect a leader who promises to "tax the other guy". This can progress to where we all agree to tax only Bill Gates and Warren Buffet.

Answer 2

There are many different ways the income is redistributed. One easy way is just by simple payments from one person or group to another. And example of this is welfare (varies by State in America) and unemployment benefits. These take taxes from a certain group (tax payers) and give them to another (the poor or the unemployed). Another way is by restricted government services. The restricted qualification is very important because if everyone can use the service it's not redistribution. Real world examples of this are medicare and medicaid in America. These take tax dollars from some Americans and use them to fund services available only to people who meet certain qualifications (in these examples age and income). Another redistribution program is Social Security.