Cost of Living (Tax it again)

I wrote a previous article that was critical about the governments general policy of Tax It as a solution to everything. I am still as critical but I will now prove how much better I am (Or how much easier it is to rant about this stuff at any rate) by showing how I would run the Tax it to death strategy so it annoyed fewer people.

First of all lets be clear on why my ideas are only good in theory. It is quite obvious that the current rash of taxes, supposedly to make us drink less and be more environmentally friendly, are really there to patch up budget shortfalls, created partly by financial mismanagement and partly because of the downturn in the housing market meaning that there is less stamp duty and other such taxes being paid. This is where the key problem in so many of these taxes comes in as it is obvious that this is a desperate attempt to make the books balance. Meanwhile cost of living increases due to rising fuel and food costs, the food costs being particularly suspicious since most farmers are barely scraping a living and food is getting more expensive, I wonder who is making all that money in between *CoughSupermarketscough*

Alcohol. Binge drinking is a problem, and while a level of personal responsibility must be taken it should be observed that alcoholism is most predominant in people from deprived backgrounds. However since people don't like airy-fairy sociological solutions the government is opting for tax and law. Currently the government wants to ban 2 for one offers and ramp up prices in both off licenses and pubs. This will actually have the most detrimental effects on fringe products enjoyed more sensibly such as high quality malt whiskey, wine and real ale. It seems a shame since the binge drinkers tend to err towards cheap cider and special offer low quality chemical lager. The current plan will basically leave this stuff relatively cheap. My idea is much better. We create a minimum charge for alcohol based on alcohol content. what do I mean? Take beer, at the moment in a Pub £2 a pint is pretty reasonable, lets call that £4 a Litre to keep things properly metric. In a Supermarket I can buy 3 500ml bottles of ale for £4 so that about £2.60 a litre. I can also buy a case of chemical gunk masquerading as beer which is 20 500ml cans for £5, so about 50p a litre. Guess which one is going to contribute to binge drinking the most. Now say we have a law, where after production costs are factored breweries are charged tax to top up the basic cost (Before super markets do their markups) to £2 per litre and make it an offence to sell cheaper than that cost. 20 cans of stella will now cost you at least £20 if the super market is making a loss on distribution costs, similarly 20 bottles of ale would cost £20. Now a super-market could do a buy 1 get one free offer on anything, but the basic cost would still have to be no less that £2 per litre. I wouldn't say this would stop the problem, but it would definitely price most people out of binge amounts while not affecting small vulnerable businesses like Ale producers.

Second one is driving in general. Cars are taxed to the absolute hilt, worse its all called green tax so it can be disguised as an environmental issue rather than a moneyspinner. An average driver, not counting costs of acquiring a licence, is charged VED on buying a new car, road tax and 50% of the cost of fuel is tax (Which the government jokingly refer to as a fixed figure) as the new road tax will be partly based on carbon emissions the people who will be wore affected are not rich people in 4x4s, who can afford £400 road tax, and indeed can afford more expensive hybrids that have very small road taxes and use less fuel, or LPG cars which is currently half the price of petrol, no it will hit poor people with families who can't afford a new car which will pump out less carbon let alone a hybrid. In all I do object to pricing people off the road, but at the moment people feel fleeced because the money seems to be falling int a big black hole. I have a couple of suggestions, first, with fuel I would adopt the SNPs suggestion that the wholesale cost of fuel is fixed. How would this be different. At the moment 50% of fuel cost is tax, mainly fuel tax, so the wholesale cost of fuel (these are simplified figures, I'm not an accountant) is 60p per litre of unleaded. Say the limit was set to £1 per lire, at this time tax received from petrol would be 40p, if the cost rose further, to say 70p we'd still pay £1 at the pump but tax would only be 30p, however, if prices fell, say to 30p per litre, we'd still pay £1 and the government would take 70p, yes there would be complaints when costs were low but planning how to run a car would be easier.

The second idea with motoring would be where the money goes. Most people's objections to "Green Tax" is that the money doesn't pay for alternatives. So all taxes received from cars, be it Road tax, VED or fuel tax, can only be spent on transport, be it road improvements, or public transport alternatives. Literally when the budget is set they take an estimate based on last years takings and say "This £x million plus whatever else we fancy adding to the pot is available for transport" at least then people would have a choice.

This was an unfocused rant but it has made me feel better. Next election I'm voting Saxon, yes he was a mad timelord but he had some very good policies on tax.