paper 3 example

2.

A) A direct tax is a tax on peoples incomes/ wealth/ firms profits whilst indirect taxes are taxes consumers pay on goods and services

B) on sheet

c) The tax is progressive because higher tax brackets pay higher taxes. This can be seen in both the tax brackets given and also the taxes payed by the people in different tax brackets. For example the middle income bracket pays 27.6% whilst the high income payes 39.8%

D. on sheet

F. Governments use a higher average rate of tax on individuals who have a higher income in order to redistribute income from richer to poorer ones. This is an attept by the government to try to redress the economic problem of an inequitable distribution of income