Tuesday October 21, 2014
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Plastic Bag and Fizzy Drink Taxes - Lib Dems, Cons and Lab screw the poor

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- Tom Winnifrith

I am sure that Gladstone and John Stuart Mill would be terribly impressed at the dynamic policy initiatives dreamt up this week by the Lib Dems. Actually I have not watched any of the Lib Dem conference and I suspect that neither has anyone else. A party that faces electoral obliteration discussing dull as ditchwater policies that will never be implemented cannot hope to compete in terms of TV time with catching up on missed episodes of the new series of Dallas. Nick Clegg you are no Bobby Ewing although I hear that after lunch Charles Kennedy can do a good impression of Digger Barnes.

I have, however, picked up on the news that the Lib Dems plan to reconnect with the public with dynamic policy initiatives to impose taxes on plastic bags and fizzy drinks. Heck, I bet that’s got Ed Milliband running scared. While it is easy to dismiss these plans as irrelevant I fear that they are not as they are exactly the sort of things that all three of the mainstream parties (plus the Greens) agree on and as such are bound to become law. The problem in both cases is that such laws are regressive (i.e. they stuff the poor) and also illiberal.

So when Nick Clegg says that he wants to get the rich to pay more in tax (Nick, they already do) that is fine. Just remember that he is lying as he is also implementing policies which will screw the poor on tax.

I refer you to a piece HERE about smoking in New York which is now a very expensive habit indeed thanks to draconian City taxes aimed at stopping folk from smoking. The point is that the hard evidence is that the taxes have caused far more middle class and rich folk to quit than poor people. As such those in the lowest income groups who smoke are now spending 25% of their income on tobacco. You may say “more fool them.” Sure. But please do not pretend that draconian taxes on unhealthy products are anything other than utterly regressive, i.e. vindictively making the poor poorer. If you think about it, the UK sees the same thing with cigarettes. I am unusual in being a middle class smoker. More working class folk smoke than middle class folk.

And this brings us to a rather unpleasant reality that the political and media elites cannot accept. We all know smoking is bad for your health. We know it is medically unwise and financially ruinous. Thus the cleverer and more self disciplined folk will not smoke at all or will quit. Stupider, lazier and less self disciplined will go buy another 20 Lambert & Butler. Cleverer & more self disciplined folk tend to have better jobs ( i.e. more middle class jobs) than lazier, thicker or less self disciplined folk who will have less mentally demanding jobs or no jobs at all ( i.e. be poor).

The left say that the poor are poor because the State has let them down, wicked Tory cuts etc. The reality is that God distributes talents in an unequal manner. Some will always be poorer than others and the less clever/self disciplined you are the greater your chances of being poor. And of being silly enough to smoke.

And so it is always going to be the case that when you whack extra tax on a product and spend zillions letting folk know that product x is bad for you, far more middle class people than those, Andrew Mitchell might term plebs, will alter their behaviour accordingly. They are smart enough to know it makes sense.

And so levying a tax on fizzy drinks or plastic bags will cut overall consumption levels. Fine. But it will predominantly be the Middle Classes who cut back. It will be they who are probably already buying less fizzy orange for the kids and more gluten free wheat drinks. And the Middle classes are already traipsing down to Waitrose with jute bags made by Bangladeshi peasants for Oxfam in increasing numbers. Bumping up taxes will accelerate these trends amongst the Middle Classes but the poor will be far slower to react.

So whatever the rhetoric about soaking the rich, Clegg (and the entire political class) is already committed to policies that will directly screw the poor with more tax. If the political elite want to make tax progressive they need to forget about health objectives as the simplest way to do this would be to scrap tax on cigarettes and beer and levy stiff new taxes on passion fruit, guacamole, sparkling water, broadsheet newspapers, cufflinks, tickets for International Rugby matches and dinner jackets.

As for liberty, I refer to the bible of freedom “On Liberty” by John Stuart Mill. What I choose to put into my body, be it nicotine, deep fried mars bars, alcohol, heroin or sugar free muesli with skimmed milk is a “self regarding action” that is to say it effects no-one but me. If I drink drive or drive while on acid that is an “other regarding action” in that it can affect the liberty, or indeed lives, of others. The State has every right to regulate “other regarding actions.” Nanny state should have no right to regulate self regarding actions. So its attempts to deter me from drinking gallons of fizzy orange via tax are essentailly illiberal.

But what does it matter? All three parties are in this area committed to policies which are an illiberal infringement of basic civil liberties and will have the effect of screwing the poor financially far more than they screw the Middle Class or rich. If only they could admit to that.

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