Direct or indirect taxes – You decide

I have been asking my year 11 students which taxes they would raise to reduce the UK’s massive budget deficit. These two articles would be perfect to help with the debate. The first shows a disadvantage of direct taxes as 50 millionaire hedge fund traders are leaving the city for Geneva to hide from the 50% income tax rate with fears that many will follow.

The second article reveals how retailers are worried that VAT will be increased in the new year to 20%. A big disadvantage of increasing indirect taxes such as VAT is it could reduce spending. An interesting lesson activity would be to set up a debate about the pros and cons of direct and indirect taxes using the two articles as case studies.