6 thoughts on “The consumption taxes that keep people poor”

  1. Posted 14/10/2013 at 15:00 | Permalink

    That’s all very well, but then how on earth will they fund the armies of finger-wagging jobsworths who infest ‘Public Health’ and its myriad offshoots? Let’s be realistic here. The likes of ASH et al rely on those sin taxes to enable them to bully and punish the people who are paying them.

  2. Posted 14/10/2013 at 15:38 | Permalink

    The fact is the poor PAY no taxes; their employers and the producers of their consumable items do.

    Employers pass on some of the taxes on employment under the guise of PAYE etc and producers pass on things like VAT in the product price.

    The point therefore is surely that the government are taxing everybody too heavily and the weighting is against the poor.

    Why then do the government want all this money? Overseas AID, Sports and Culture, propping up the banks?

    Little point in fiddling arouind with lower taxes on booze and fags which will simply then be loaded onto other things when the fish that require frying are vastly bigger.

    The first Country to drastically reduce the size of its government will find its fortunes have changed markedly for the better.

  3. Posted 14/10/2013 at 20:23 | Permalink

    I’m not sure that I am understanding waramess correctly. Tobacco product manufacturers are obliged to add duty to the price of their products. They pay the duty at the ‘tax point’. The duty is then passed on down the line of wholesaler, retailer and then purchaser. If the duty on a packet of 20 cigs is, say, £6 when the product leaves the manufacturer, it is still £6 when it reaches the purchaser. We should note that manufacturer, wholesaler and retailer do not pay the duty. It is the end purchaser who does. The others are merely tax collectors. Thus, if the poorest among us are the people who are spending more of their money on the products, it is the poorest who are paying a disproportionate amount if their income in duty. Whether they are being silly or naughty in spending their money in that way is not relevant.
    I agree with waramess that the money raised by these duties would have to be found from elsewhere, but I am not sure what the ‘net’ effect of reducing duties would be. Would there be savings by cutting duties? I would have thought that there would be savings connected to trying to stop smuggling. Maybe there would be savings in duty collection costs. Maybe fewer people would buy such products abroad. But Snowden’s point is precisely that the distribution of the tax burden is inequitably slanted to ‘punish’ the poorest people.
    However, there is a huge elephant in the room, isn’t there? The various Zealots want everyone else in the world to raise their duties to the same lever of the UK and Ireland!

  4. Posted 15/10/2013 at 11:10 | Permalink

    Junican, I would like to explain: a producer, (as well as the wholesaler and the retailer) has many costs and all are passed on to the consumer in the price of their products.
    I do not seek to obfuscate, it is the common perception of taxes being a Kaleidoscope of payments to the revenue that does so. Wages and salaries are a part of those costs but we do not think of a producer as the “collector” of wages and salaries.
    All taxes, like all other costs of production, end up being paid for by the consumer but the way in which tax collection is perceived hides from the ordinary man in the street the terrifying damage done by big government to the productive sector
    Ideally we should see but one tax and that at the moment would be 50 percent on turnover. Forget the concept that our tax system favours the poor; it does not, as is so eloquently set out in the article and everybody would be able to see clearly the true cost of government.
    I suppose that it will never happen, certainly never more or less likely than a reduction of the punitive taxes imposed on alcohol and tobacco so my point was, better to go after the big fish (the tax system as a whole) rather than chase a moving target (taxes on individual products).

  5. Posted 16/10/2013 at 02:49 | Permalink

    Thanks for that, waramess.
    Would that it were possible! We have seen calls for simplification of all tax systems, but without success. But why is it that there is no success? It can only be because there are vested interests which prefer the status quo.
    What is horrible about this ‘status quo’ is that it encourages the creation of jobs which are designed to inhibit growth. These jobs (in regulations, for example) actually damage the producer of the funds which sustain the jobs!
    It seems to be a common phenomenon at this time for certain wealth creators to be inhibited by the regulators who are sustained by the wealth creators. Such regulators have an inbuilt demand to perpetuate themselves. Therefore they need to produce more regulations to justify their existence. That is not uncommon.

    Is it not obvious that far too many people are employed simply to damage growth? Is it not obvious that it is the Government (not the politicians) which is driving the damage? Politicians ought to get a grip. They were not elected to concur with the self-perpetuating opinions of civil servants.

  6. Posted 08/11/2014 at 12:36 | Permalink

    The Greens in their 2015 manifesto pledges appear to solve this, by replacing most benefits (housing benefit a work in progress) that are hit by the double whammy of stealth indirect taxes, VAT and income tax, even though far below the basic tax allowance.

    There would need to be no benefits admin DWP / private contracts and Jobcentres,
    needed for The Greens’ policy of:

    – universal Citizen Income, non-withdrawable, non-means tested, automatic by right of citizenship

    – Bettered State Pension,
    that gives everyone basic food money when for so many state pension sole money in old age,
    rather than now when so many will be left penniless forever in old age
    from the biggest con in political history
    of the flat rate pension (Pension Bill 2014),
    that is withering away the state pension,
    already the lowest of all rich nations bar poor Mexico.
    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    This would solve the 70 per cent rise in benefit sanctions, which mean no benefit no access to food vouchers to food banks, themselves only 3 vouchers permitted per year. Benefit sanctions for months on someone 60 and disabled as well as on young family with new baby, when it takes about a month to starve to death. Doctors are saying again and again the massive rise in malnutrition hospital admissions.

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