The Issue Of Income Inequality - 2307 Words

The issue of income inequality in the United States is complicated and does not have a definite answer. Income inequality can be measured in a few different ways. The first measurement for the income inequality in a country is to look at the percentages on households and group them into income categories, called distribution by income category. The second measurement for income inequality is called distribution by quintiles or fifths. This is when you divide the total number of people, households, families into five groups called quintiles to examine the percentage of total before tax income received by each quintile. Each quintile would then be ordered by income and households in the category. The quintile distribution can be displayed visually by a Lorenz curve. Which is a graph with percentage of income on the vertical axis and percentage of households on the horizontal axis, and the quintile data is plotted and makes a curve, which will be compared against a curve representing perfect income equality. Income inequality expressed by the Lorenz curve can be expressed by a Gini ratio, which is a numerical measure of the overall dispersion of income. This discussed data is only for a specific set of time, usually a year, and when individuals move from quintile to quintile over time is called income mobility. The main way to reduce inequality Government redistribution of income is usually when income is taken from higher income households through taxes and transfers them toShow MoreRelatedThe Issue Of Income Inequality Essay1496 Words   |  6 PagesOne of the most deeply divisive issues in the United States is the question of income inequality: whether it exists and whethe r we are obliged to address it. 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