The Irish Government has committed to increasing carbon tax year-on-year until it reaches €100 per tonne in 2030. Outline how taxes, such as carbon tax, affect each of the following:
1st Prong Consumers: Environment:
Tax decreases a consumer’s disposable income…
Increasing the price of non- renewable fuels through tax discourages its use…
2nd Prong …which lowers their standard of living.
…which helps to reduce air pollution / which encourages them to switch to a greener alternative.
You should always state the impact (e.g. lower disposable income) and the result of the impact (lower standard of living) for questions like this.
TOP TIP
CLASS ACTIVITYINTRO ACTIVITY
Key Skill: Evaluate the impact of taxation on government, consumers, businesses and the environment
State whether each of the following is true or false. Give a reason for your answer.
a) Reducing VAT on tourism will encourage more tourists to visit Ireland. b) Increasing excise duty on cigarettes will encourage people to smoke more.
c) Lowering motor tax on electric vehicles will encourage drivers to choose cleaner cars.
d) Raising corporation tax will encourage more multinational companies to set up in Ireland.
e) Increasing the carbon tax on home heating oil will reduce the disposable income of households.