There is often much discussion about the impact of tax and benefits on the distribution of income. This is an interesting graph which shows the impact of different taxes and benefits on income distribution. As expected, direct taxes (like income tax) are progressive – i.e. they take a bigger % of income from high earners. …
Readers Question: Tax changes in recent years have brought a significant increase in tax burden in the UK expressed as a percentage of GDP. Can you please assess the possible impact of such an increase? An increase in the burden of tax from say 35% of GDP to 38% of GDP could have the following …
Why Local Councils Are Going BANKRUPTWatch this video on YouTube Rubbish piled up on the streets was one of the most evocative images of the 1970s. But the winter of discontent is back with Birmingham city council struggling to stave off bankruptcy. But, it’s not just Birmingham, the national audit office argue that a cumulative …
Thatcher introduced a break with the post-war consensus introducing new economic ideas such as Monetarism Free-market supply side policies Privatisation Tax cuts (especially for high income earners) Reduced power of trade unions. The impact was far ranging. Did Thatcher Ruin or Save the UK Economy?Watch this video on YouTube The 1970s Economy The 1970s was …
In 1979, Mrs Thatcher was elected Prime Minister of the UK. At the time, the UK was experiencing double-digit inflation, trades unions were powerful and there were signs British industry was becoming increasingly uncompetitive. Mrs Thatcher introduced revolutionary economic policies which had a deep impact on the UK economy. They were characterised by a belief …
In summary, to reduce poverty, government policies could include: Means-tested welfare benefits to the poorest in society; for example, unemployment benefit, food stamps, income support and housing benefit. Minimum wages. Regulation of labour markets, for example, statutory minimum wages Free market policies to promote economic growth – hoping that rising living standards will filter down …
There are two main classifications of poverty: Absolute poverty – income below certain income necessary for basic living standards Relative poverty – household income 60% below median wages. See: Measuring poverty Absolute poverty was much more of an issue before the introduction of the Welfare State in 1945. Since 1945, rising living standards and a …
The benefit principle is the idea that government spending should be met by the people who receive them. In other words, everyone who receives government spending, should contribute towards it. This benefit principle was the justification for Margaret Thatcher’s Poll Tax. Everyone was charged the same poll tax rate because the argument was that everyone …