Taxation — Edexcel Past Paper Questions

With reference to Figure 4 and your own knowledge, explain the distinction between a progressive and a regressive tax.

4.5.2 Taxation

With reference to Figure 4 and Extract A, examine the likely impact of the ‘freeze in income tax thresholds’ (Extract A line 1) on aggregate demand.

2.2.1 Aggregate Demand · 4.5.2 Taxation

Evaluate the likely microeconomic and macroeconomic effects of tax cuts in the UK.

One of two options in Section A — candidates answered this or the other.

4.5.2 Taxation · 2.6.2 Demand-Side Policies

With reference to Extract C and your own knowledge, discuss methods the UK government could use to increase tax revenue.

4.5.2 Taxation

In 2018, the United States Government cut the corporation tax rate (tax on company profits) from 35% to 21%. Income tax rates for US citizens were also reduced: for example, the top rate of income tax was cut from 39.6% to 37%. (Source adapted from: https://www.nytimes.com/) Evaluate the likely impact of cutting tax rates as a policy to increase economic growth.

One of two options in Section C — candidates answered this or the other.

4.5.2 Taxation · 2.6.3 Supply-Side Policies