Several governments are introducing taxes on unhealthy food and drinks. These taxes are generally regressive. In addition, some of these governments are raising spending on healthcare. In other nations, healthcare is supplied by the private sector. The number of state-owned enterprises is falling in many countries because of privatisation.
(a)[2]
Define the term regressive tax.
(b)[4]
Explain why the social benefit of healthcare exceeds the private benefit.
(c)[6]
Analyse why a government imposes taxes.
(d)[8]
Discuss whether consumers are likely to gain when state-owned enterprises become private sector firms.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A smaller percentage of income is taken from rich people than from poor people” …