Governments often aim to reduce income inequalities. The diagram shows the effects of using taxation and benefits to try to achieve this aim. [Figure 14.1] What can be concluded about the effects of taxes and benefits from the diagram? A All income groups are better off except those earning more than 40000 dollars per year. B Benefits paid to the lower income groups are not a burden because they are not paid out of tax revenues. C The average final income of the top 20% exceeds the combined final incomes of the other groups. D The progressive taxation system still favours the top 20% over the bottom 20% of households.

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