The World on Wednesday – government failure in Germany
Recommend on Google+
A favourite GCSE question on tax is… ‘one reason for the relatively high price of tobacco in the UK is a high level of taxation. Do you agree that tobacco should be highly taxed?’
A good answer will recognise the positives of taxing tobacco such as reducing consumption of a demerit good and increasing revenue for the government. It would also look at the negatives such as equity issues.
This article from Germany adds to the argument against highly taxing tobacco. In Germany, 20% of all cigarettes are illegally brought in from foreign countries as smokers try to avoid the increasing tax. By putting up the tax the government have only succeeded in increasing the number of illegal cigarettes (26 million) consumed and has actually lost revenue. This article could be used to help answer this question or for any lesson on market or government failure.
blog comments powered by Disqus
Tags
activity, advertising, affordability, alistair darling, anti-competitive behaviour, anti-dumping, apple, appreciation, aqa gcse economics, articles, asia, balance of payments, balance of trade, bank of england, banks, basic economic problem, basket of goods, beat the teacher, benefits, bidet, birthrate, borrowing, budget, budget deficit, budget surplus, business growth, business objectives, capacity, capital, car industry, car manufacturing, cash cow, china, chocolate, christmas trees, class task, cocoa, competition, competition commission, competition in action, competitive markets, complements, conditions of supply, confidence, congestion, conspicuous consumption, construction, consumer confidence, consumer spending, consumers, cost of living, costs, costs of production, costs, revenues and profits, cpi, credit crunch, cross price elasticity of demand, currency, data, data response, debt, deficit, delicious data, demand, demand and supply, demand and supply in action, demand for labour, demerit good, demerit goods, depreciation, derived demand, diagram, diagrams, diseconomies of scale, dollar, double dip, double-dip, downturn, easyjet, economic growth, economic gw, economic policies, economics, economies of scale, economy, elasticity, elasticity of supply, employment, end of term activity, enterprise, eu, euro, eurozone, exam advice, exam help, exam practice, exam style questions, exam technique, excess demand, exchange rate,All tags for the GCSE Economics Blog
