Tax reform
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Introduction
Students explore tax reform as a microeconomic policy used by governments to affect aggregate supply, domestic macroeconomic goals and living standards. Students investigate the impact of one tax policy on Australia’s productive capacity and consider any trade-offs associated with this policy.
Australian Curriculum or Syllabus
Topics:
- Microeconomic or aggregate supply policies
- Tax reform as an aggregate supply policy
- The effects of tax reform on aggregate supply, domestic macroeconomic goals and living standards
- Trade-offs associated with economic efficiency
- AS curves and factors that cause shifts in the curve
See also:
Teacher resources
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Visualiser
Modelling Tax Reform
Teacher notes
Modelling tax reform
Student learning resources
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Explainer
Tax reform as aggregate supply policy
Investigation
Case study of a tax reform
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
- Introduce the topic by explaining that students will be investigating one tax reform to discover whether it was an effective strategy for improving the nation’s productive capacity.
- Students read the explainer. If required, encourage students to use the reading for meaning strategy as they read the explainer or to take notes using the Cornell note taking system.
- Discuss with students the different types of tax reforms that are available to governments and brainstorm any examples students can provide.
- Use the visualiser to model how tax reform might grow Australia’s productive capacity. See the teacher’s notes for an explanation of how tax cuts (aggregate supply policy) will boost the sustainable level of national production while lowering the general price level.
- Use a grouping strategy to organise students into groups of 4.
- Give each group member a different tax reform to investigate:
- company tax
- PAYG tax
- general tariffs
- abolition of the carbon tax and the MRRT.
- Students complete the investigation in relation to the tax reform they have been allocated.
- Each group member shares their findings with their group.
- Groups discuss the trade-offs associated with each tax reform.
- As a class discuss the trade-offs students identified.
- Think-pair-share: Do the benefits of the tax reform outweigh the trade-offs? Why?