The taxation of earned income accounts for more revenue than any other form of taxation across most OECD countries. Alongside the benefit and taxation system, it also does most of the heavy lifting in redistributing resources from richer to poorer households. Not surprisingly, it occupies a special place in debates about levels and structures of taxation.“ (Mirrlees et al, 2011, p46)
When a government is deciding what type of tax rate structure to adopt they can choose between taxes that are either (i) proportional, (ii) progressive or (iii) regressive. The UK government, alongside other developed and emerging economies, have adopted a progressive tax structure in respect of income tax.
Identify what a progressive tax structure is and critically evaluate the benefits and risks of adopting a progressive tax system, illustrating your discussions with examples where appropriate.
Your assignment should be in the form of an essay, with an introduction that identifies the context, scope and objectives and a conclusion that summarises the key points of your analysis. Your evaluation should be based on a good range of academically robust, relevant and current sources. The discussions should be coherent, logical and clear, making appropriate use of paragraphs, with attention to good grammar and spelling. Your analysis should have appropriate depth, but be concisely and clearly expressed in order to ensure effective use of the word count. This is an essay so subheadings should be used sparingly and should be appropriate.
Please see the grading criteria grid for more in depth guidance in respect of these requirements.
Mirrlees, J., Adam, S., Besley, T., Blundell, R., Bomd, S., Chote, R., Gammie, M., Johnson, P., Myles, G., and Poterba, M., (2011) Tax by Design Oxford, Oxford University Press