At present, the refusal of extensive redistributive policy in the U.S. population is conspicuous when tracing Obamaʼs attempt to reform the health care system. In contrast to the United States, there is much less opposition to redistributive policies in Germany, and the formation of a political movement like the tea party is not in sight. Regarding lump-sum transfer payments financed by proportional income taxation, such a redistributive measure is theoretically beneficial for all individuals with below-average incomes. Hence, as income distribution is generally skewed to the right, economic theory predicts the support for redistributive policy to increase with income inequality. All the more surprising, the United States is more averse to redistribution, although income inequality in the United States is higher than in Germany. Consequently, factors other than the relative position in the income distribution must additionally influence individual preferences for redistribution. These factors are addressed in the literature, such as in Alesina and Glaeser (2004) who compare the size of the welfare state between continental European countries and the United States. According to Alesina and Glaeser, varieties in social beliefs, political institutions, and/or social heterogeneity are the main reasons for international differences.
KeywordsIncome Inequality Income Distribution Great Equality Redistributive Policy Income Mobility
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