Worksheet on Taxation (Tutor Version: Beginners)

Step 1
Government revenue

Largest source of government revenue: Income Tax
Smallest source of revenue: Capital Taxes
Council Tax: Local tax on property %

Step 2
A good tax

Income Tax - Progressive
Corporation Tax - Progressive
VAT - Regressive

Step 3
Types of Taxation

Income Tax 10%, 22%, 40%

VAT 17.5%, 0% for zero rated goods

Capital Gains Tax Gains over £7,200 are taxed at the individuals income tax rate and companies pay corporation tax on their capital gains

Corporation Tax 10% 20%, 30%

Excise Duty Beer 26p, cigarettes (20) 181p duty plus 87p ad valorem, wine (75cl) 116p, spirits (75cl) 548p, petrol (litre) 51p, unleaded 49p, diesel 49p

Step 4
Reducing Consumption

Step 5
Any changes from:

Personal Income Taxes: Basic rate 29% down to 22%.
New lower rate of 10%
Top rate 60% down to 40%
Independent taxation of husbands and wives
New tax relieved savings regimes (ISAs)
Capital gains charged at income tax rates
Mortgage interest relief cut right back

National Insurance: Restructured to reduce liabilities for low paid
Employee rate up from 9% to 10%
Base extended to cover some benefits in kind

VAT: Main rate up from 15% to 17.5%
Base extended to domestic fuel

Excises: Big increases for tobacco and road fuels

For the taxation reform section accept any suitable reform with explanation.