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BBC: Guernsey tax allowance to end for high earners

Article published: Oct 4, 2016 – out of date: no longer suitable for your IB Economics commentary

IB Economics syllabus: Macroeconomics (inequality in the distribution of income, redistribution)

The government of Guenrsey decided to make their tax system more progressive. For example, to provide “[r]educed or no allowance for those earning more than £138,000.” Excellent article to talk about the inequality in the distribution of income (showing a Lorenz curve) and about the ways in which the government collects taxes to have more funding for helping “those most in need”. In order to have a more balanced government budget (i.e. more tax reveue), there are also plans for the introduction of higher indirect taxed (on property, sugar, tobacco and alcohol).

Source of image: BBC/Thinkstock

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