Last Word Chp.21

Year                                Median                               Average

1995                               $84,000                             $307,900

1998                                  98,100                               386,700

2001                                  106,100                             487,000

2004                                  107,200                             517,100

2007                                  126,400                             584,600

2010                                   77,300                               498,800

Go to Table 1  the Last Word and compute the ratio of average wealth to median wealth for each of the 6 years. What trend do you find? What is your explanation for the trend? The federal estate tax redistributes wealth in two ways: by encouraging charitable giving, which reduces the taxable estate, and by heavily taxing extraordinarily large estates and using the proceeds to fund government programs. Do you favor repealing the estate tax? Explain.

Read Chapters 21 regarding Income Inequality and Discrimination; please respond to the Last Word Question and be sure to provide examples of taste for discrimination and your opinion on the economic impact and the same for Statistical Discrimination. Explain both areas in a total of 4 paragraphs using examples.