Fiscal Policy as a Catalyst for Poverty Reduction and Social Equity

Abstract

Public policy serves as a fundamental instrument in achieving sustainable social welfare through the effective management of national resources and the implementation of equitable taxation systems. This study aims to analyze the role of fiscal policy, particularly taxation and public expenditure, in alleviating poverty, promoting income redistribution, and fostering inclusive economic growth. Employing a library research approach that focuses on scholarly works published within the last five years, this study identifies that the integration of progressive taxation, targeted social transfers, and strategic public investment significantly contributes to reducing economic inequality and improving social well-being. Moreover, evidence demonstrates that adaptive fiscal measures, such as social protection programs and fiscal stimulus packages introduced during the COVID-19 pandemic, have effectively maintained macroeconomic stability and protected vulnerable groups from severe economic shocks. The findings underscore that public policies grounded in justice, transparency, and inclusiveness play a crucial role in enhancing the resilience of national economies. Hence, the formulation of socially responsive and equitable fiscal frameworks becomes imperative for ensuring long-term welfare and balanced economic development.