A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2022 · Q141 Mark
Which combination of tax changes is most likely to be regressive in a developed economy?
Aincreasing the rate of wealth tax and raising the rate of sales tax (VAT) on luxury products
Bintroducing a tax on owning property based on its sales value and increasing the rate of income tax
Creducing the basic rate of income tax and increasing the duty on fuel
Dremoving the tax-free allowance for income tax and extending sales tax (VAT) to include all food
✓ Correct answer
D: removing the tax-free allowance for income tax and extending sales tax (VAT) to include all food
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