In a magical land inhabited by long lashed, multi-colored Alpacas who love lollipops, rainbows and friendship, there's a yawning divide in wealth distribution ... what's behind the inequality gap? Click here to find out.
The role of taxation and other measures in promoting equity
- Distinguish between direct and indirect taxes, providing examples of each, and explain that direct taxes may be used as a mechanism to redistribute income.
- Distinguish between progressive, regressive and proportional taxation, providing examples of each.
- Calculate the marginal rate of tax and the average rate of tax from a set of data. (HL only)
- Explain that governments undertake expenditures to provide directly, or to subsidize, a variety of socially desirable goods and services (including health care services, education, and infrastructure that includes sanitation and clean water supplies), thereby making them available to those on low incomes.
- Explain the term transfer payments, and provide examples, including old age pensions, unemployment benefits and child allowances.
The relationship between equity and efficiency
- Evaluate government policies to promote equity (taxation, government expenditure and transfer payments) in terms of their potential positive or negative effects on efficiency in the allocation of resources.
These objectives are covered in the booklet you started in the last class.... continue!
As HL students. you will also receive some mathematical problems to do for taxation and you will do a real life example to compare average tax rates in Hungary and New Zealand.
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