Economics class: Scotland top-rate tax rises widen gap with rest of UK

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

• Taxation, labour markets, behavioural economics

Click to read the article below and then answer the questions:

Scotland top-rate tax rises widen gap with rest of UK

• Distinguish between a i) progressive; ii) regressive; and ii) proportional tax system

• ‘Prior to the budget, economists . . . estimated that reducing the top rate threshold could raise just £40mn in extra revenue.’ With reference to the income effect and the substitution effect, analyse the potential pros and cons of such a policy

• Evaluate whether higher rates of taxation will make Scotland a less appealing place to invest

Gavin Clarke, Emmanuel College