Policies Widening Income Gaps

Steps:

• Progressive taxes reduce inequality by taxing high earners more; decreasing them favors the rich.
• Minimum wage lifts low incomes; decreasing it widens gaps for the poor.
• Transfer payments redistribute to the needy; reducing them increases disparity.
• Evaluate options for net effect on inequality.

Why B is correct:

• Decreasing progressive taxes, minimum wage, and transfer payments all shift resources from low to high earners, per the Gini coefficient measure of inequality.

Why the others are wrong:

• A: Increasing minimum wage offsets inequality from other changes.
• C: All three policies (higher taxes, wage, transfers) reduce inequality via redistribution.
• D: Higher taxes and transfers counteract the minimum wage cut.

Final answer: B