In 2023, the government of Colombia implemented a major tax reform aimed at reducing its fiscal deficit and addressing deep wealth inequality. The reform focused heavily on direct taxation, including introducing a permanent progressive wealth tax and increasing income tax rates on high earners, while avoiding broad-based increases in indirect taxes like Value Added Tax (VAT).
Evaluate the view that a government seeking to reduce income inequality while maintaining stable tax revenues should rely more on direct taxes than indirect taxes.
68 exam-style questions on OCR A Level Economics Fiscal policy. Each one has a worked solution and a mark scheme showing where the marks go.