A Level Economics 14 marker feedback needed!

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meli77
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#1
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#1
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Size:  212.0 KBHi!

Would you please be able to give me feedback on this 14 marker? I have attached the source. I'd appreciate it very much!

Indirect taxes are taxes on expenditure. One likely effect of the increase in indirect tax on diesel and petrol is an increase in tax revenue. For instance, the extract states ‘will help raise AUS$1.1 billion per year’ As a result, this will significantly increment employability rates due to more labour needed to create the infrastructure the government is aiming for. Consequently, people’s spending will increase which will lead to economic growth when they purchase goods and services as it increases indirect tax revenue. Hence, an increase in tax revenue would be a likely effect of the increase in indirect tax.

Whilst it is recognised that an increase in tax revenue could lead to economic growth, ultimately road improvements could also lead to an economic decline. As there is a higher number of infrastructure, the demand and consumption of cars are likely to increase due to the increase in labour which would have increased their purchasing powers. The accumulated number of cars would inevitably lead to congestion meaning that carbon emissions would compound pollution. This would lead to more health issues among Australians resulting in a higher burden on the healthcare system. Therefore, an increase in tax revenue could also lead to an economic decline.

Another likely effect of the increase in indirect tax on diesel and petrol is the decrease in the production of cars. That is because consumers may not be willing to pay higher indirect taxes to purchase petrol or diesel for their cars as petrol is a complement good for cars and has a negative XED, leading to a downfall in the demand for cars altogether. This would have a severe impact on the car manufacturers because their profits would be reduced hence would have to decrease their supply of cars due to the loss of incentive to make a profit. Thus, this is how an increase in tax revenue would lower the production of cars.

Though it could be argued that an increase in tax revenue could lead to a decrease in the production of cars, it could alternatively result in the increase of the demand for other methods of transport i.e. trains or buses. If that were the case, TFL’s revenue would potentially increase which could create more job opportunities for bus/train drivers, increasing further the disposable income for citizens. Hence how an increase in tax revenue could result in an increase in the demand for public transport.
Last edited by meli77; 3 months ago
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safahJ
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#2
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#2
Hi i feel as though you aren't developing your point and thus chains of analysis to do with that point.

What exactly is the question

example

an indirect tax would increase tax revenue:
as a result of imposing an indirect tax this can result in tax revenue increasing. Firms will either bear the burden of this tax or pass this onto consumers. Increase in tax revenue- hypothecation into public services, merit goods- greater social benefits for society. Increase in tax revenue can also alleviate some of the negative externalities involved. Labour is a derived demand, demand for labor will increase as a result- inc employement- help to achieve macroeconomic obj. These workers earn income- higher tax revenue- hypothecated into public goods. Tax revenue generated can thus be used for investment adding to capital stock- increase LRAS- productive potential- LR econ growth- multiplier and accelerator effect- greater final impact on real gdp

However:
Gov suffer from imperfect information when setting the value of a tax as a result this could result it the tax being set too high which could result in unintended consequences- firms leave the market etc. Also if producers pass burden of the tax onto consumers as diesel can be said to be inelastic- then regressive impacts upon the poor- takes a larger proportion of income from then in comparison to the rich.

Evaluation could also be:

size of the tax
will it actually solve the problem
how long will it be in place for
who bears burden of the tax
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safahJ
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#3
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#3
(Original post by meli77)
Name:  Screenshot 2022-01-20 at 20.59.59.png
Views: 30
Size:  212.0 KBHi!

Would you please be able to give me feedback on this 14 marker? I have attached the source. I'd appreciate it very much!

Indirect taxes are taxes on expenditure. One likely effect of the increase in indirect tax on diesel and petrol is an increase in tax revenue. For instance, the extract states ‘will help raise AUS$1.1 billion per year’ As a result, this will significantly increment employability rates due to more labour needed to create the infrastructure the government is aiming for. Consequently, people’s spending will increase which will lead to economic growth when they purchase goods and services as it increases indirect tax revenue. Hence, an increase in tax revenue would be a likely effect of the increase in indirect tax.

Whilst it is recognised that an increase in tax revenue could lead to economic growth, ultimately road improvements could also lead to an economic decline. As there is a higher number of infrastructure, the demand and consumption of cars are likely to increase due to the increase in labour which would have increased their purchasing powers. The accumulated number of cars would inevitably lead to congestion meaning that carbon emissions would compound pollution. This would lead to more health issues among Australians resulting in a higher burden on the healthcare system. Therefore, an increase in tax revenue could also lead to an economic decline.

Another likely effect of the increase in indirect tax on diesel and petrol is the decrease in the production of cars. That is because consumers may not be willing to pay higher indirect taxes to purchase petrol or diesel for their cars as petrol is a complement good for cars and has a negative XED, leading to a downfall in the demand for cars altogether. This would have a severe impact on the car manufacturers because their profits would be reduced hence would have to decrease their supply of cars due to the loss of incentive to make a profit. Thus, this is how an increase in tax revenue would lower the production of cars.

Though it could be argued that an increase in tax revenue could lead to a decrease in the production of cars, it could alternatively result in the increase of the demand for other methods of transport i.e. trains or buses. If that were the case, TFL’s revenue would potFor entially increase which could create more job opportunities for bus/train drivers, increasing further the disposable income for citizens. Hence how an increase in tax revenue could result in an increase in the demand for public transport.
For greater analysis and evaluation check out my revision guides. This will give you specific points and help with you getting the full marks. This answer lacks structure and doesn't flow too well. However it Is a good response.

https://www.stuvia.com/bundle/103454...revision-guide
https://www.stuvia.com/bundle/101656...revision-notes
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meli77
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#4
Report Thread starter 3 months ago
#4
(Original post by safahJ)
For greater analysis and evaluation check out my revision guides. This will give you specific points and help with you getting the full marks. This answer lacks structure and doesn't flow too well. However it Is a good response.

https://www.stuvia.com/bundle/103454...revision-guide
https://www.stuvia.com/bundle/101656...revision-notes
Hey! Thank you very much!
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Last edited by meli77; 3 months ago
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safahJ
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#5
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#5
(Original post by meli77)
Hey! Thank you very much!
Let me know how you get on with the notes. These can help you increase your grade if needed. Check them out, I'm offering a discount if interested
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