What Are Three Reasons For Income Inequality

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According to the U.S. Congressional Research Service, there are mainly 3 reasons for the income inequality of American society. The first reason is that American national output used to lesson the income inequality is fewer than other countries do. In Germany, public social spending accounted for 27.8 percent of gross domestic product in 2009, compared with 19.2 percent in the United States, according to the OECD. The second reason is the American tax system. If the tax is used to solve the social problems, for example the terms of employment, the income inequality can be reduced. However, America is less effective at reducing inequality through taxes and benefits than the OECD average. The third reason is that the way of earning is divided.

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