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Business, 30.11.2019 02:31 Heygirl1923

Redistributive philosophies and incentives consider a society comprised of two people. lorenzo earns an income of $120,000 per year and neha earns an income of $35,000 per year. the government is considering a redistribution plan that would impose a 20% tax on lorenzo's income and give the revenue to neha. without any incentive distortion, lorenzo would retain $96,000 and neha would end up with $59,000. however, let us assume that since lorenzo will not receive all the income he earns, he decides to work less and earn an income of only $110,000, of which will be owed in taxes. with the redistribution plan, lorenzo will take home an income of the $22,000 that lorenzo pays in taxes will be transferred by the government to neha. let us assume that since neha now receives payment from the government, she will not work as many hours and will earn an income from work of only $34,000 instead of her initial $35,000. with the redistribution plan, neha's total income (including the government received) is without a redistribution plan, total income in this society after the redistribution plan is implemented, total income in this society therefore, the redistribution plan total income in this /decreases).according to the utilitarian political philosophy, the $22,000 transferred from lorenzo to neha will benefit neha than it hurts lorenzo. which of the following statements is true according to this philosophy? a. the government should definitely institute the plan because it will increase overall utility. b.the government should not institute the plan because it has no right to take money from one person and give it to another. c. the redistribution may or may not be desirable, depending on the relative magnitude of the utility gain and the efficiency loss.

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Redistributive philosophies and incentives consider a society comprised of two people. lorenzo earns...

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