Question 18M.1.SL.TZ1.b
| Date | May 2018 | Marks available | [Maximum mark: 15] | Reference code | 18M.1.SL.TZ1.b |
| Level | SL | Paper | 1 | Time zone | TZ1 |
| Command term | Evaluate | Question number | b | Adapted from | N/A |
Evaluate the view that the best way to reduce income inequality in a country is by using progressive taxation.
[15]
Answers may include:
- definition of progressive taxation, income inequality
- diagram to show how progressive taxation could decrease income inequality (inward shift of the Lorenz Curve), or a progressive tax diagram
- explanation of how progressive taxation reduces the disposable income gap between people of lower and higher incomes
- examples of where or how progressive taxation has been used
- synthesis or evaluation.
Evaluation may include: the impact of progressive taxation in reducing income inequality including:
tax avoidance/tax evasion; disincentive effects; effects on efficiency; consideration of alternative approaches such as government spending on merit goods/transfer payments, minimum wage, consideration of `best’.
NB If only progressive taxation is considered, with explanation and evaluation of its impact, but no alternative policy is considered, a maximum of mid-Level 3 should be awarded, as the question would not have been fully answered in terms of `best way’.
Marks should be allocated according to the Paper 1 markbands for May 2013 forward, part B.
