Government Redistribution Policy

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Session Overview


A key element of government policy that determines how much we can redistribute among households is the tax rate. The tax rate is used to raise revenues, which can then be used in government programs. What type of taxes we should use and how high tax rates should be are major questions that economics attempts to answer. This lecture provides an introduction to the economics of taxation.

The Capitol Building, where the United States Congress proposes economic policy such as tax rates. Image courtesy of Ed Marshall on Flickr.

Keywords: Social insurance; asymmetric information; social security; moral hazard; EITC.

Session Activities


Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:

  • [R&T] Chapter 15, "Public Finance and Public Choice."

Lecture Videos


Check Yourself

Concept Quiz

This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.


Further Study

These optional resources are provided for students that wish to explore this topic more fully.

Other OCW and OER Content

14.41 Public Finance and Public Policy, Fall 2010. MIT OpenCourseWare An in-depth course on the government’s role in the economy.


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