A more fundamental reason for concern about income distribution is that people care about the welfare of others People with higher incomes often have a desire to help people with lower incomes This preference is demonstrated in voluntary contributions to charity and in support of government programs to redistribute income A public goods argument can be made for government programs that redistribute income Suppose that people of all income levels feel better off knowing that financial assistance is being provided to the poor and that they experience this sense of well-being whether or not they are the ones who provide the assistance In this case, helping the poor is a public good When the poor are better off, other people feel better off; this benefit is nonexclusive One could thus argue that leaving private charity to the marketplace is inefficient and that the government should participate in income redistribution Whatever the underlying basis for redistribution, it certainly occurs The governments of every country in the world make some effort to redistribute income Programs to redistribute income can be divided into two categories One transfers income to poor people; the other transfers income based on some other criterion A means-tested transfer payment is one for which the recipient qualifies on the basis of income; means-tested programs transfer income from people who have more to people who have less The largest means-tested program in the United States is Medicaid, which provides health care to the poor Other means-tested programs include Temporary Assistance to Needy Families (TANF) and food stamps A nonmeans-tested transfer payment is one for which income is not a qualifying factor Social Security, a program that taxes workers and their employers and transfers this money to retired workers, is the largest non-meansAttributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 798