- 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.
Most of these objectives are covered in the booklet you started in the last class.... continue!
As HL students you need to be able to calculate marginal and average tax rates and you will be given a copy of the following handout to work on...