Combining progressive taxes and wage increases targets inequality from both ends

Steps:

• Define income inequality as the gap between high and low earners.
• Assess policies: progressive taxes redistribute from rich to poor; minimum wage lifts low incomes; subsidies must aid the disadvantaged.
• Compare combinations: effective ones address both top (tax) and bottom (wage) of income distribution.
• Select the pair that maximizes redistribution without favoring the wealthy.

Why B is correct:

• Progressive taxation (higher marginal rates) reduces top incomes via the ability-to-pay principle, while minimum wage raises bottom incomes, narrowing the Gini coefficient for inequality.

Why the others are wrong:

• A: Taxes high earners but ignores boosting low wages, limiting overall redistribution.
• C: Tax helps, but luxury car subsidy ($40,000+) primarily benefits affluent buyers, exacerbating inequality.
• D: Raises low wages but doesn't curb high incomes, allowing the top to pull further ahead.

Final answer: B