A government is considering policies to reduce wealth inequality. Which policy would most directly target wealth rather than income inequality?

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Question

A government is considering policies to reduce wealth inequality. Which policy would most directly target wealth rather than income inequality?

Accepted Answer

Introducing an inheritance tax on large estates — Award 1 mark for identifying that inheritance tax directly targets the transfer of accumulated wealth between generations. A is incorrect — income tax targets current earnings, not accumulated wealth. C is incorrect — minimum wage affects labour income, not wealth. D is incorrect — food subsidies help with living costs but do not directly address wealth holdings.

Answer

Introducing an inheritance tax on large estates

Answer

Providing subsidies for essential food items

Answer

Increasing the top rate of income tax

Answer

Raising the national minimum wage

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