Examine why redistribution of wealth is considered to be an important function of a tax system

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Examine the benefits and welfare system

Order type: Case Study

Question

Redistribution of wealth is considered to be an important function of a tax system. While this transfer can aim to reduce the income and wealth gap between the rich and the poor it can also lead to entrenched behaviours and dependency. Policy makers continuously strive to minimise the negative effects of this important function and reforms to the benefits and welfare systems are proposed and implemented from time to time.

Many research studies have looked at the relationship between taxation and labour supply and they have been summarised in Chapter 3 of Mirrlees Review titled ‘Labour Supply and Taxes’. The evidence suggests that reform of benefits and tax system can result in increased incentives for certain groups of people.

In July 2010 the Secretary of State for Work and Pensions presented to the UK Parliament a consultation document titled ‘21st Century Welfare’. This document outlined the intention of the coalition government to change the benefits system. After a period of consultation the Department of Work and Pensions published a second document titled ‘Universal Credit: welfare that works’.
In this assignment examine the benefits and welfare system by answering the following questions.

1) Identify and summarise the research evidence presented in Chapter 3 of Mirrlees Review titled ‘Labour Supply and Taxes’ which is most relevant to the reform of the benefit and welfare system.
2) Summarise the shortcomings of the existing benefits and welfare system identified by the document titled ‘21st Century Welfare’.
3) Summarise the proposed changes to the welfare and benefits system with reference to the document ‘Universal Credit: welfare that works’ and other documents available on the Department of Work and Pensions (DWP), Her Majesty’s Revenue and Customs (HMRC), Directgov websites and any other publication which are relevant.

 

4) Summarise the criticism which has been published by different organisations and in the press about the proposed changes to the benefits and welfare system.PLACE AN ORDER TODAY AND GET 15% DISCOUNT (CODE GAC15)

 

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