4.a The tax divides to direct tax and indirect tax.

Direct tax implies tax imposed on

income, which can be considered as income tax. Indirect tax implies tax imposed on
spending, which can be considered as sales tax.

Governments impose taxes for many reasons. For instance, the tax revenue can be put into
building infrastructures and hospitals and schools, these infrastructures can have positive effects
on the third parties. An increase in income tax may be fairer than an increase in sales tax. Firstly, if
the income tax system in a country uses progressive tax system, this means for the people who
gets higher salaries will pay more tax than the low-income people. When the income tax rising,
this implies the inequality between the rich and poor can be reduced.

Secondly, the sales tax will increase the inequality between the poor and rich because
the rich and the poor pays the same amount of tax when consuming. Therefore, an
increase in income tax may be fairer than an increase in sales tax. Thirdly, if the
government increase the tax imposed on the necessities like vegetables, it is very
harmful to the poor.

However, an increase in income tax may be not fairer than an increase in sales tax. If the
direct tax system in a country uses proportional tax system, this will increase the
inequality. Because the poor and rich pay the same proportion of income tax, and for the
poor the income tax will cost them a lot.

Whether an increase in income tax is fairer than an increase in sales tax depends on
some factors. Firstly, it depends on the extent of increase. If the sales and income tax
rises a little proportion, they may not have significant effect on the inequality. Secondly, it
depends in the time. In the short run, increase in the indirect tax will result in rise in the
price of goods, and the consumers cannot change their decisions of consuming
immediately. To be specific, a consumer is used to take the taxi as the transportation tool,
when the indirect tax of taxi increases, the consumer can not find a cheaper substitute
immediately, so this consumer may still take the taxi until several days she or he find a
substitute. So, in the long run, the increase in the indirect tax may not have significant
influence in increasing the inequality.

Overall, an increase in income tax is fairer than an increase in sales tax in most
situations.

As written, this essay would likely be awarded 3 or 4 points depending on who is marking. It is
riddled with imprecisions in language, misapplied definitions, and parts lack clarity.