Flat Tax

Question 1

Define a Flat Tax

Answer 1

Putting a specific tax ( eg. £1 per packet) on a unit of goods

Question 2

Examples of goods that Weill have a Flat Tax applied to them.

Answer 2

• Cifgarettes
• Fuel
• Alcohol
• Sugar
• Pesticides

Question 3

Why does the Government apply Flat Taxes?

Answer 3

• Natural Fundraiser

- To deter people from buying the product

Question 4

Why does the government tax cigarettes and alcohol?

Answer 4

• Discourage the use of the product
• Long - term prevents further NHS and Policing costs
• Source of Tax revenue
• Investing tax revenue into ‘cleaning up’ the industry.

Question 5

Problems of Flat Taxes

Answer 5

• Takes a long time to generate substantial revenue
• Creates a Black Market
• Police have to crack down down on people avoiding the tax causing more government spending
• Poorer people will be worst affected