An increasing number of governments are levying taxes on unhealthy food and drinks. These taxes are generally regressive. Some of those governments are also boosting their healthcare spending. In other countries, healthcare is supplied by the private sector. The number of state-owned enterprises is falling in several 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 levies taxes.
(d)[8]
Discuss whether consumers are likely to gain if 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 tax that takes a lower percentage of income from rich people than from poor people” …