Taxation Flashcards

1️⃣ Familiarise yourself with the flashcards:

Look through all the flashcards to see what's on both sides.
Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

Look at the question or prompt on each card and try to remember the answer before flipping it over.
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Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What is taxation?

The system where the government collects money from people and businesses by law.

To pay for public services like the NHS and schools, reduce inequality, and change behaviour, such as smoking less.

A tax paid straight to the government on income or profit, such as Income Tax or Corporation Tax.

A tax on spending that is added to prices, such as VAT or duty on fuel and alcohol.

A tax that takes a higher percentage as income rises, so higher earners pay a larger share.

A tax that takes a lower percentage as income rises, so it takes more of a low earner's income.

A tax that takes the same percentage of income from everyone, whatever they earn.

Ad valorem is a percentage of the price (like VAT). A specific tax is a set amount per unit (like pence per litre of fuel).

It raises firms' costs, so prices go up and fewer units are bought and sold.

To cut consumption and help pay for the health and social costs they cause.