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Abstract

Direct Government payments increase income in the farm sector by redistributing income from nonfarm to farm people. Direet payments arc largest at high income levels. Thus, low-income farm famifies may not benefit greatly from these payments. However, data compiled by the Internal Revenue Service from Federal income tax returns show greater inequality in the personal distribution of income of people with farm earnings t1lan in the distribution of payments. Payments should therefore be expected to slightly decrease rather than increase overall income inequality.

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