Quote of the day 28th March 2016

"I've noticed something odd about the debate over sugar tax.

My left-wing friends are sure that if you put up tax on sugar it will help reduce obesity. Yet they regard it as a myth that if you put up tax on company investment it reduces company investment.

Meanwhile my right-wing friends are certain that if you put up tax on company investment it will discourage company investment, yet see it as plainly ridiculous to argue that putting up tax on sugar discourages consumption of sugar."

(Lord Danny Finkelstein, diary column in The Times on Saturday.)

Comments

Jim said…
My main problem with the "suger tax" is much the same as all, what i like to call "sin taxes".
one of the main calls for Higher fuel duty, was to persuade the population to consume less fuel. Pretty simple really. Of course it has knock on side effects, where by it unduly harms sectors of the economy, but we can leave those aside for now, lets just look at Fuel duty as a way of pressuring people to use less fuel.

Well, oddly enough that is what people did - great, they stopped buying the big engine V8 cars, and large trucks with thirsty engines. so the manufactures had to have a re-think, in order to stay in business. They started to design cars that run cleaner, busses and trucks that run cleaner and improve fuel efficiency, they started to streamline wagons and busses more, hey, my wifes 2 year old Honda Civic 1.6 diesel is as quick my 10 year old accord 2.2 diesel, but she regularly gets 75 miles to the gallon, i am lucky to get 50. she also pays nothing for road tax as that tax was based on co2 emmissions (mine is currently £135 per year)

So these taxes worked right? - well no, you see governments are very good at forgetting what taxes were imposed for, and are good at spending the money, so any "loss of consumption" is seen in a loss of a revenue stream, and one that needs to be compensated elsewhere.

You see "sin taxes" only ever go into the big black hole that is public spending, they are never "ring fenced" to be used for something, like fuel could have been used for envionmental only issues, or sugar could be used for "obesity changing things" this wont happen. Its just quickly an income stream, which when "improved" upon, will leave a short fall in government income. Every sin tax does this.
11:57 am
Chris Whiteside said…
Interesting point - a much more sophisticated critique of "sin taxes" than the opne Danny was responding to.

My answer would be

1) We need to raise a certain amount of tax revenue to fund "public goods" like law & order, defence and public health.

2) Whatever we tax to pay for this will be discouraged and thereby distort the economy.

3) As a general rule, therefore better to tax as many things as possible at as low a rate as possible and thereby minimise the distortion rather than have lots of exemptions and thereby much higher tax, and more distortion, on the things you do tax.

4) But within that principle and within sensible limits, given that whatever you tax will be discouraged, and you have to tax something, other things being equal it is better to get more of your tax revenue from things it is actually a good idea to discourage. And less from taxes on things the country desperately needs more of.
6:59 pm
Jim said…
To that I would ask why?, Why not just have income tax at a rate that people can see how highly they are taxed?

You see so many small taxes and no one knowing exactly how much the government are taking at any time. Why not just do it there and at least be honest about it?
8:20 pm
Post a Comment

Popular posts from this blog

Nick Herbert on his visit to flood hit areas of Cumbria

Please note that the post below was published more than ten year ago on 21st November 2009 Nick Herbert MP, shadow cabinet member for the Environment, Food, and Rural Affairs, was in Cumbria this morning to see the areas affected by the flooding. He writes on Conservative Home about his visit. Here is an extract. I’ve been in Cumbria today to see the areas affected by the floods. I arrived early in Keswick where I met officials from the Environment Agency. Although the river levels had fallen considerably and homes were no longer flooded, the damage to homes had been done. And the water which had got into houses wasn’t just from the river – it was foul water which had risen from the drains. I talked to fire crews who were pumping flood water back into the river, and discovered that they were from Tyne & Wear and Lancashire. They had been called in at an hours’ notice and had been working on the scene ever since, staying at a local hotel. You cannot fail to be impressed by the
Read more

Quotes of the day 19th August 2020

Image
"Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise."  ( Cato the Elder , who lived 234 BC - 149 BC, quoted in "Lives" by Plutarch.) There is a similar saying by Germany's Iron Chancellor, Otto von Bismarck: Benjamin Franklin is supposed to have put the same saying in a more humorous form: "Wise men profit by the mistakes of others, while fools will not learn even from their own blunders." See also this thread on the "Quote Investigator" website . Let us all be wise and learn from the events of the last few days.
Read more

Quote of the day 24th July 2020

I was moved to put the passage below forward as a quote today when I saw a horrible post on twitter from someone writing that it was "excellent" that someone who took a different view from her about Brexit had died. I won't write which way round it was so that all the Remain supporters can assume the post was from a Brexit fanatic welcoming the death of a remainer and all the Leavers can assume it was a Remainiac welcoming one less Brexiteer. There's been plenty of nasty stuff on both sides but if you catch anyone of your own viewpoint  posting something like that who might listen to you, please do call them out on it - and point out that they're giving everyone on your side of the argument a bad name. Anyway, here's the quote from John Donne.
Read more