Question

What should Canada's policy be towards income inequality ? Should the government try to actively alter the recent increase in inequality? If so, why? If you think the government shouldn't intervene - do you think there is a tipping point when it might affect the growth of the economy or social stability?

Answer 1

The policies that canada could adopt to alter the income inequality among its population-

1. An affordable, accessible, quality education. A well-educated country is a capable, skilled, and well-off country; education is arguably the single most critical tool poorer segments of the population can use to ascend to the middle class and stay there.Approximately Sixty-five percent of jobs by 2025 will require some sort of post-secondary education. So we need to invest more in accessing post-secondary education and encouraging young people in particular

2. Reduce the social capital gap. Social capital is the aggregate value of someone's social connections. Those with large social networks full of rich contacts are more likely to tap into them themselves and get a job, reach a new customer or start a business.

   "Imagine you have a $10,000 loan crowdfunded by 400 Kiva lenders. That's 400 potential customers of that business; that's 400 potential Facebook Likes for that business's Facebook page, which is brand impressions and marketing; it's 400 potential LinkedIn connections, who can potentially make a connection to get their product on the shelf at Whole Foods " Price says.

3. Juvenile/criminal justice reform. Getting arrested can put a permanent blot on your record, fairly or unfairly. All too often this happens to young people, who then become passed over by society and stuck in a vicious cycle of poverty or crime.

   "There's 57,000 young people in juvenile detention and correctional facilities every day, and hundreds of thousands more connected to the criminal justice system, so ensuring they don't become disconnected youth is just important for communities and the larger economy," Many of them are incarcerated for nonviolent crimes. So we need to find a way to keep them out of the system and then seamlessly move them back into society to support themselves and their families.

4. Progressive taxes, estate taxes. There's no clear-cut formula showing how to solve income inequality. But if there were one, it would certainly involve tax reform.

   A truly progressive tax rate – one where the wealthiest pay the highest rates and the poorest the lowest – can only help to keep income inequality in check. The U.S. has a progressive tax system in name, but in practice there are gaping loopholes. Closing up the loopholes, and taxing capital gains and dividend income as regular income, is one of the more powerful tools society can use to fight income inequality

5. Other partial solutions. (A)Increasing access to high-speed internet (B)Decreasing crony capitalism: make it hard or impossible to buy politicians. (C)Improving the quality and access to affordable health care (D)Crafting financial regulations that prevent too-big-to-fail banks without restricting responsible lending. (E)Charitable giving (F)Increasing the minimum wage

In my opinion the government of canada should try to actively alter the recent increase in the income inequality because when we Live in an unequal society causes stress and status anxiety, which may damage your health. In more equal societies people live longer, are less likely to be mentally ill or obese and there are lower rates of infant mortality.Income inequality, researchers have found, include higher rates of health and social problems, and lower rates of social goods, a lower population-wide satisfaction and happiness and even a lower level of economic growth when human capital is neglected for high-end consumption.

Altering the increasing inequality in the income will not affect the growth of the economy or social stability because the rising inequality transfers income from low-saving households in the bottom and middle of the income distribution to higher-saving households at the top. All else equal, this redistribution away from low- to high-saving households reduces consumption spending, which drags on demand growth. If the demand falls the economy will be in danger as this will reduce the consumption expenditure of the consumer and this will lead to reduction in the transactions in the country which will then decrease the earnings of the people.