Economics class: Number of people caught in 60% ‘tax trap’ up 45% in two years
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Specification:
Fiscal policy, taxation
Click to read the article and then answer the questions:
Number of people caught in 60% ‘tax trap’ up 45% in two years
Describe the personal allowance taper for those earning more than £100,000 a year
Explain how fiscal drag contributes to more individuals having part of their income taxed at 60%
Explain the disincentive effects that are associated with high marginal rates of tax
UK income tax thresholds might be described as ‘lumpy’, with a taper applied to the personal allowance for those earning more than £100,000 a year, and the taper to child benefit for those earning more than £60,000 a year. Evaluate the benefits that would accrue to the UK economy if such anomalies were corrected
Gavin Clarke, Emmanuel College
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