Suppose, in a country, the government decides to start
redistributing income from rich households to poor households. The
government considers two policy options:
Incentivize rich households to donate to the charity of their
choosing — for example, the government could match each dollar the
household donates to their charity.
Enact an income tax on high income households and directly
redistribute the tax revenue to poor households.
Considering both efficiency and equity, provide a reason that
(a) would be preferable to...