The table below shows income and expenditure on goods and services for four individuals for the tax year ending April 2024.
| Individual | Income (£) | Expenditure (£) |
|---|---|---|
| Fiona | 80,000 | 40,000 |
| George | 20,000 | 18,000 |
| Harriet | 50,000 | 35,000 |
| Ian | 150,000 | 30,000 |
The government has set a proportional income tax rate of 20% and a tax on all expenditure of 15%. Which one of the following statements is true?
During the tax year ending April 2024, the:
gap in income between Fiona and Ian remained the same before and after paying the income tax.
expenditure tax was progressive because the absolute amount of expenditure tax paid by Ian (£4,500£4,500£4,500) was greater than that paid by George (£2,700£2,700£2,700).
individual who faced the highest total tax burden, measured as a percentage of income, was George.
total revenue collected by the government from these four individuals' expenditure tax was greater than the revenue collected from their income tax.
76 exam-style questions on AQA A Level Economics 1.7 The distribution of income and wealth: poverty and inequality (A-level only), covering 1.7.1 The distribution of income and wealth, 1.7.2 The problem of poverty, and 1.7.3 Government policies to alleviate poverty and to influence the distribution of income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.