Every policy here works, and every policy here costs something. The examinable skill is not listing the instruments — most candidates can — it is holding the equity and efficiency trade-off steady while you assess them, and knowing that the size of that trade-off is an empirical question rather than a matter of principle.
Why is it so much easier to tax income than wealth?
AQA examines this as domestic microeconomic policy. Edexcel splits the material between Theme 2 fiscal policy and Theme 4 inequality, so an Edexcel answer normally has to import the tax mechanics from elsewhere.
| Specification | Reference | Where it is examined |
|---|---|---|
| AQA A-Level Economics 7136 | 4.1.7.3 | Paper 1 25-mark essays; Paper 3 synoptic with fiscal policy |
| Edexcel A Economics 9EC0 | 4.2.2 with 2.6.2 | Themes 2 and 4, Papers 2 and 3 |
| Pearson Edexcel IAL Economics | WEC14 · Unit 4 | The global economy |
| Policy | How it redistributes | The cost of it |
|---|---|---|
| Progressive income tax | Average rate rises with income, so the tax burden falls disproportionately on higher earners and disposable-income Gini falls. | Weakens work and effort incentives at the margin; risks avoidance, evasion and migration of high earners. The Laffer argument sets an upper bound. |
| Cash transfers and benefits | Directly raises income at the bottom of the distribution. The fastest-acting instrument available. | Creates the poverty trap where withdrawal is steep; carries an opportunity cost in the budget; take-up is imperfect. |
| Benefits in kind | Free education and healthcare raise real living standards without appearing in income data at all. | Consumption is decided by the state rather than the household; benefits can accrue disproportionately to the articulate middle. |
| National minimum and living wage | Raises the wage floor for the lowest-paid in work. | Classical analysis predicts excess supply of labour; monopsony analysis predicts employment can rise. Which applies is empirical, and saying so is the evaluation. |
| Wealth, inheritance and capital taxes | Attacks the stock rather than the flow, which is where inequality is most concentrated and most persistent. | Assets are mobile and hard to value; the taxes are politically fragile and often raise little relative to their salience. |
| Supply-side measures | Education, training and childcare raise the marginal revenue product of low earners, lifting market wages rather than topping them up. | Slow — a decade, not a parliament — and the returns are uncertain at the individual level. |
The standard objection to redistribution is that it blunts incentives and so reduces the output available to redistribute. That objection is real, and it is also routinely overstated in student answers, because its size depends on magnitudes nobody in the room knows. Four honest lines of evaluation:
Then take a position. The top band does not reward balance for its own sake; it rewards a justified judgement, which means the conclusion has to follow from the weighing rather than sit beside it.
Application is worth more marks than knowledge on this specification — AO2 carries 26–29% against AO1's 20–23%. So the examples are not decoration. They are where a third of the paper lives, and the ones that earn are the ones specific enough to be checked.
Income arrives through a payroll system that already reports it; assets are mobile, hard to value and well defended.
Auto-enrolment moved more household wealth than most tax changes of the same period, without taxing anything at all.
The gap between pre-tax and post-tax inequality is the only honest measure of how much redistribution actually happens.
Each of these becomes a full piece in its own right, in the branches below. What is here is the hook; the argument, the data and the essay application are what the pieces are for.
Every question on this specification is marked against four assessment objectives, and they are not weighted equally. Most revision treats a topic as a body of knowledge; the paper treats it as four separate skills applied to that knowledge. This topic is examined as a assess a policy topic, so here is what each objective looks like on it specifically.
| Weight | What it is | What it means on policies to redistribute income and wealth | |
|---|---|---|---|
| AO1 | 20–23% | Knowledge and understanding of terms, concepts, theories and models | Define the instrument precisely. Most policy answers lose their first mark by being vague about what the policy actually is. |
| AO2 | 26–29% | Application of that knowledge to economic contexts | Anchor it to the economy or market in the question, with the magnitudes that matter rather than a general gesture. |
| AO3 | 26–29% | Analysis of issues and their impact on economic agents | Trace the mechanism from the policy to the outcome without skipping a link. The skipped link is where the mark was. |
| AO4 | 22–25% | Evaluation of arguments, using evidence to support a judgement | Weigh it: cost, time lag, unintended consequences, and who bears it. Then reach a judgement that follows from the weighing rather than sitting beside it. |
Everything above is the anchor — what the thing is and how it is examined. Each piece below is built to train one assessment objective rather than to cover the topic again, and they accumulate. Nothing on this page gets deleted; it gets added to.
This is the section where hedging is punished and a defended judgement is rewarded. Getting there reliably is a matter of training, which is what the marking service is for.
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