Sin taxes are taxes on the poor
Nanny-state types know this. They just don’t care.
In Britain, Europe and across the world, taxes on tobacco, alcohol and sugar are used by governments to try to push people into what they deem to be healthier lifestyles.
Indeed, nanny-state policies are infesting Europe through its political institutions. In a recent memo, the European Commission set out plans to get rid of unanimity voting within the European Council on matters of taxation, and introduce qualified-majority voting ‘as a useful tool to progress tax measures’ regarding ‘fighting climate change, protecting the environment or improving public health’.
But ‘improving public health’ is all too often a cover for simply raising taxes on the poorest in society. That so-called sin taxes are regressive isn’t even disputed, as the Institute of Economic Affairs made clear in a report last year. And public-health advocates know this.
The investor and former mayor of New York, Michael Bloomberg (net worth: $47 billion), is now ‘global ambassador for noncommunicable diseases’ of the World Health Organisation. He is a vocal advocate of sin taxes on an international level. Last year, his organisation Bloomberg Philanthropies announced a task force to promote lifestyle regulations across the globe, including, among others, the Norwegian minister of health, Scottish first minister Nicola Sturgeon, and Tabaré Vázquez, president of Uruguay.
In a panel at the International Monetary Fund last year, Bloomberg addressed the question of regressive sin taxes. ‘Some people say, well, taxes are regressive’, he said. ‘But in this case, yes they are. That’s the good thing about them because the problem is in people that don’t have a lot of money.’
IMF managing director and chair Christine Lagarde chipped in at the end of the clip: ‘So it’s regressive, it is good. There are lots of tax experts in the room… And they all say that two things in life which are absolutely certain. One is death, the other one is tax. So you use one to defer the other one.’
‘That’s correct. That is exactly right. Well said’, adds Bloomberg.
Whenever sin taxes are introduced, so-called public-health advocates will always be among those least affected by them – they will still be able to afford as much tobacco, chocolate or alcohol as they like.
That is not the case for the poorest in society: like any other consumption tax, it’s the poor who are most affected by sin taxes, since they spend a larger proportion of their income on these goods, in comparison to higher earners.
Not only are sin taxes deeply patronising, a case of the rich deciding what it is acceptable for the poor to consume; they are also, simply put, socially unjust.
Consumers should be allowed to enjoy themselves. Yes, we should all be made aware of the health risks associated with our lifestyles. But, ultimately, it should be up to each of us to choose for ourselves what we consume.
We need to stick up for this right more than ever. Public-health advocates are now even pushing for taxes on red meat. And they won’t stop there. Nanny-state types always find a new angle through which they might ruin everything that is enjoyable.
Bill Wirtz is a policy analyst for the Consumer Choice Center. Follow him on Twitter: @wirtzbill
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