Income Inequality In Australia Essay

Recommendation Reducing inequality in each countries is a serious issue that nowadays many leaders of a country are concerned with. There are many strategies that are occurred to help unequal income distribution in each country. The good example is direct or indirect transfer payment for poverty. According to (), cash transfer is to solve economic inequality in short-run period. People get money from the government, then they spend it fastly and it is gone. It is not the effective solution for long-run period in order to increase employment and reduce poverty, but this way also can help sometimes, depended on a circumstance and the goal of government. Denmark is the country which is ranked at the number one out of>> countries that has lowest income inequality. Hence, Denmark is a good example to look at how this country handle and manage income inequality. Denmark believes that to reduce inequality in the country is the combination of many methods :

Taxes are collected by people rely more on income tax, following by production and import tax, and other tax. The government change rate of income tax to reduce marginal tax rate which leads to development in income tax. Tax bracket for the middle class increase, so less people pay middle tax. It also has the allowance of employment for employees who earn low-wage income. In the same time, the bracket for top tax also increase, so the government can exercise lower revenue or tax, but marginal tax does not decrease as middle and top taxes which the government can collect. Hence, income inequality in 2007 to 2009 declines. However, Denmark reform many times of taxation. The government reform again. The middle tax is still the same, but high income people are collected less tax. Therefore, there is inequality in income distribution again. However, it is balanced by increasing allowance for low income