Evaluate the view that increasing taxation is the best way to reduce a budget deficit

Evaluate the view that increasing taxation is the best way to reduce a budget deficit. (June 2024)

Plan

• Paragraph 1:
  • Argument: on the one hand, increasing taxation can be beneficial as it can reduce the budget deficit whilst also reducing inflation
  • Diagram: left shift in AD
  • Evaluation: depends on the state of the economy
• Paragraph 2:
  • Argument: on the other hand, increasing taxation can be damaging as it can lead to a reduction in short-run and long-run economic growth
  • Diagram: left shift in LRAS
  • Evaluation: depends which tax; the effect of higher tariffs and lower unemployment benefits would be different
• Judgement: impact on macroeconomic performance depends on the exact type of tax/spending that has been changes and the state of the economy

A-Level Economics Tutoring

I offer one-to-one and small group A-Level Economics tutoring for students across the UK and internationally. With 87+ five-star Google reviews and tutoring experience since 2017, I specialise in helping students understand difficult concepts and improve their exam technique.