6. The chapter uses the analogy of a "leaky bucket" to explain one constraint on the redistribution of income.
a. What elements of the U.S. system for redistributing income create the leaks in the bucket? Be specific.
b. Do you think that Republicans or Democrats generally believe that the bucket used for redistributing income is leakier? How does that belief affect their views about the amount of income redistribution that the government should undertake?
7. Suppose there are two possible income distributions in a society of ten people. In the first distribution, nine people have incomes of $30,000 and one person has an income of $10,000. In the second distribution, all ten people have incomes of $25,000.
a. If the society had the first income distribution, what would be the utilitarian argument for redistributing income?
b. Which income distribution would Rawls consider more equitable? Explain.
c. Which income distribution would Nozick consider more equitable? Explain.
Take a shot. What do you think?
6. a. The elements of the U.S. system for redistributing income that create leaks in the "leaky bucket" analogy include:
1. Tax loopholes: The presence of loopholes in the tax code allows wealthy individuals and corporations to minimize their tax obligations, resulting in less revenue available for redistribution.
2. Income inequality: High levels of income inequality mean that the wealthy minority pays a larger share of taxes, while lower-income individuals receive more in social welfare benefits. This can lead to less effective redistribution.
3. Inefficiency in government programs: Ineffectiveness, waste, and administrative costs associated with government programs targeted at income redistribution can result in leaks in the bucket. Examples include misallocation of resources, fraud, and bureaucratic inefficiencies.
b. Generally, Republicans tend to believe that the bucket used for redistributing income is leakier, while Democrats argue for more robust redistribution efforts. This belief affects their views on the amount of income redistribution the government should undertake.
Republicans, who view the bucket as leakier, will argue for less government intervention and lower taxes, emphasizing the importance of individual responsibility and free market forces to address income inequality. They are more likely to advocate for supply-side economics and emphasize the role of private charity and voluntary action in addressing societal needs.
In contrast, Democrats, perceiving the bucket as less leaky, typically advocate for more government intervention in income redistribution. They often support progressive tax policies, expanding social safety nets, and investing in public services to address income inequality and promote social mobility.
7. a. The utilitarian argument for redistributing income in the society with the first income distribution (nine people with incomes of $30,000 and one person with an income of $10,000) would be based on maximizing overall social welfare. Utilitarianism focuses on the greatest good for the greatest number of people. In this case, redistribution could be justified by the fact that the overall well-being of the society as a whole would increase if the income of the person with $10,000 is increased, even if it means reducing the income of the others slightly.
b. Rawls would consider the second income distribution (all ten people with incomes of $25,000) more equitable. Rawls proposes a theory of justice based on fairness, known as "the difference principle." According to this principle, social and economic inequalities are only acceptable if they benefit the least advantaged members of society. In the second distribution, everyone has an equal income, which aligns with Rawls' idea of fairness.
c. Nozick would consider the first income distribution (nine people with incomes of $30,000 and one person with an income of $10,000) more equitable. Nozick advocates for a minimal state and a strong emphasis on individual rights and entitlements. From his perspective, the first distribution is more just because it represents the result of voluntary transactions and individual choices. Nozick argues that any redistribution beyond rectifying past injustices or enforcing minimal rules of justice would violate the rights of individuals to the fruits of their labor.