of your dream away from you. Thus, there is some reluctance to engage in a redistributive policy to reduce

inequality.

However, when those for whom the likelihood of living the American Dream is very small are considered, there are

sound arguments in favor of trying to create greater balance. As the text indicated, a little more income equality,

gained through long-term programs like increased education and job training, can increase overall economic output.

Then everyone is made better off, and the 1% will not seem like such a small group any more.

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15 • Key Terms 381

Key Terms

earned income tax credit (EITC) a method of assisting the working poor through the tax system

effective income tax percentage of total taxes paid divided by total income

estate tax a tax imposed on the value of an inheritance

income a flow of money received, often measured on a monthly or an annual basis
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