Thursday, March 13, 2008

Still The Poor Wot Gets The Blame - And The Taxes

Watch the drinks industry squeal as the Chancellor raises duty by a modest amount.
Yet for 10 years, there had been no increase in duty on spirits. This was always the subject of one of the few jokes in Gordon Brown's budgets, e.g., "this will benefit the Scotch whisky industry in all parts of the United Kingdom!"
Oh, how we laughed.
Meanwhile, tobacco had been subject to raised duty every year for ten years.
I don't want to get into a bidding war on which is most dangerous - tobacco kills more people (although alcohol is catching up fast) but alcohol causes social disorder, domestic violence, road accidents and millions of lost working days.

But I have strong reservations about whether it's acceptable to use taxation to change behaviour. It's a point that is seldom made these days but all taxation on purchases is regressive - it hits the poor more than the rich.
Whether it's tobacco, alcohol, vehicle licensing, petrol duty or airport taxes, the wealthy can comfortably absorb these increases without changing their lifestyle.

Is it morally right to say that you will use the price mechanism, through taxation, to force the poor and those on average incomes to change their behaviour while those on higher incomes can afford to continue to smoke or drink themselves to death, drive gas-guzzling cars and jet around the world as frequently as they wish?
No, it's not. But it's disappointing that almost nobody today will question the age-old double standards and class-based hypocrisy that continue to underlie our politics.

3 Comments:

At 3:49 PM, Blogger Geoff said...

Obscenely high earners still paying 40% tax, then.

Hopefully their April pay increases will pay for their drinks.

 
At 4:08 PM, Blogger Elizabeth Pisani said...

Is it morally right to say that you will use the price mechanism, through taxation, to force the poor and those on average incomes to change their behaviour while those on higher incomes can afford to continue to smoke or drink themselves to death,

Leaving aside the issue of whether morality is a good basis for public policy, I'd have to ask: if rich people can afford to kill themselves faster than poor people, how come they have longer life-expectancies? Must be that a gas-guzzling car is safer than public transport...

Glad to find your site.

 
At 4:48 PM, Blogger Willie Lupin said...

geoff: yes, the corollary of my argument was, of course, that income tax is progressive and therefore fairer. But the cant today is that the wealthy need obscene incomes as an 'incentive' whilst the poor don't.

elizabeth: personal morality is not a good basis for public policy. Concepts of fairness, justice and social cohesion are.
There are, of course, multiple reasons why the rich live longer, including better nutrition and access to quality, private healthcare.
I focused on taxation of harmful activities but we have VAT on essentials like household fuel. You won't find the wealthy old among the thousands who die of hypothermia every year. These wealthy old will still collect the Government's sticking plaster of the Winter Fuel Allowance so it's a win, win situation for them!

I was pleased to join the discussion on your own site. However, my occasional visits to the Guardian's message boards give me high blood pressure so I try to avoid them.

 

Post a Comment

<< Home