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Questions and Answers
What is the purpose of taxation in a modern society?
What is the purpose of taxation in a modern society?
- To discourage motoring
- To encourage individual saving habits
- To accumulate and redistribute wealth within a country
- To influence economic factors such as employment levels, inflation, and imports/exports (correct)
Which taxation policy encourages individual saving habits?
Which taxation policy encourages individual saving habits?
- Fuel duties
- Landfill tax
- Tax on cigarettes
- Gift Aid Scheme (correct)
What type of taxation is characterized by the proportion of taxation raised increasing as income rises?
What type of taxation is characterized by the proportion of taxation raised increasing as income rises?
- Landfill tax
- Progressive taxation (correct)
- Income tax
- Regressive taxation
Which tax represents a lower proportion of income as income rises?
Which tax represents a lower proportion of income as income rises?
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How does the taxation system impact social justice?
How does the taxation system impact social justice?
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Study Notes
Purpose of Taxation
- The primary purpose of taxation in a modern society is to generate revenue for the government to finance its activities and provide public goods and services.
Taxation Policies
- A progressive taxation policy encourages individual saving habits, as it allows individuals to retain a larger portion of their income.
- Progressive taxation is characterized by the proportion of taxation raised increasing as income rises.
Types of Taxation
- Regressive taxation represents a lower proportion of income as income rises, placing a greater burden on low-income individuals.
Impact on Social Justice
- The taxation system has a significant impact on social justice, as it can redistribute wealth and income, reducing economic inequality and promoting fairness.
- A well-designed taxation system can help reduce poverty and promote social welfare by providing essential services and benefits to those who need them most.
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