Taxing sin (particularly gluttony?)

I see the TJ is calling for sin taxes as a way to raise revenue although they roll in pop and chips under this rubric.    I am not sure Vachon Cakes should be in the same category as gambling, booze and cigs but I guess these days sin is in the eye of the beholder (or sinner in this case).

When I took that course last spring on innovation in economic development at Harvard, the lady sitting next to me was from Denmark where her son – a member of the government – was in charge of implementing a sin tax (as defined above) in that country.  They rolled it out even as we were at the course.

They dumped it six months later – it was deeply unpopular mainly because people thought it was unfair – tax pop but no tax on very fat imported cheese.

I don’t often disagree with the folks at the TJ but this time I feel compelled to.  There are other ways to impact social behaviour that putting more tax on selected food groups.    I guess if there was a national or even international move it would be easier but for a province to do it alone – tough politically for sure.  The NB government has displayed a desire to proceed cautiously across just about every public policy issue – I don’t think they would jump into something like this.

They may raise the HST a point or two – but don’t bet on it before the election.  Now they have said the budget wouldn’t be balanced before the election so there is no political reason to raise the HST.

In the end we are  out of balance – structurally.  The Taxpayer Federation wants goernment to slash and burn programs.  The Business Council – yes the Council – is calling for tax increases.  Others want a greater focus on economic development.  The feds and their 40% transfer payments are out there in a bit of limbo.

Like any Solmonesque and politically tuned government, they will likely do a smorgasbord of things – raise some taxes, commit to some spending cuts, try and raise new revenue elsewhere.  The Lord folks loved to raise fees way back when.    That way you piss off everyone a bit but not a big swath of voters a whole lot.    The latter is what kills you – if Al Hogan turns lock stock and barrel against you – you end up with 11 straight days with the front page story on the evils of toll highways.  By election day poor old Camille Theriault had little horns coming out the sides of his head.


3 thoughts on “Taxing sin (particularly gluttony?)

  1. The Irving media just wants to distract people from what the public has been saying for YEARS-raise corporate taxes and income taxes on those that can afford it. The writing though has been on the wall for Irving media, even a decade ago Charles Leblanc got the residential tenants act changed even though CBC was on strike, and the Irving media mentioned the issue ONCE in an off handed way that made it unclear what exactly the issue was about. After a by-election, BOTH parties made a dash to try to take credit and change the act first-and that was based on only a blog, in the days before facebook. When there are only two parties to choose from, I’d seriously question statements like that Al Hogan REALLY had that much effect on people’s attitude about Camille Theriault. I think people are even more hostile to editors trying to tell them what to think, than politicians.

    ‘Sin’ taxes though aren’t that much different than the consumptive taxes you were talking about the other day. Taxing varous foods is idiotic and virtually impossible. Several years ago the ontario government made noises about taxing ‘fast food’ and the lobbying was pretty quick, ruthless and effective. In this day and age though you’d think OIL would be on the ‘sin’ list, but I wonder if the Irving media has that included. And from the looks of it, they are about to get into even more trouble with beer prices and may have to lower them further.

    Even Al Higgs apparantly hasn’t been informed that the Ontario government has had a ‘health premium’ for the last decade. But at least they were smart enough to bring it in in their FIRST budget. And Higgs seems to be indicating that it would be a ‘user fee’, which ends up hurting those least able to pay, and probably would result in a charter challenge. If these guys would just READ something other than Irving papers then maybe they’d get an idea of what the rest of the world is doing.

  2. People talk about raising corporate taxes which could be useful but that’s partly what attracted me to move to NB. Also people don’t understand that corporations provide jobs and dividends are taxed lower because this is after tax income by the corporation. In other words, they’ve already paid corporate tax, what’s left is often doled out as dividends. So people who get dividends shouldn’t have to pay yet again on those dividends as much as they would for regular income. Meanwhile we guarantee lobster prices due to political pandering and prevent competition.

    The general problem is a desire to tax successful people while others can work seasonally and collect $1 billion a year in EI claims. We have a revenue problem here folks – get the natural gas, pipelines, wind turbines, and other projects going without delay. People like to reject these things due to fear of change, while collect transfer payments from other provinces like Alberta.

    When the recession hit, the resentment towards the so-called 1% was scary to me, all the while people don’t want to retrain for the skills that in demand today. I have more than enough IT work from home here in NB (for remote clients in Canada and US) while others don’t seem to understand where money comes from.

  3. VERY few people have been attracted to New Brunswick because of the corporate tax rates. People understand full well that corporations are taxed at 4.5%-10%. And if you are an investor, then I’d argue you should be taxed HIGHER because you didn’t actually work for that money. But between corporate tax rates and capital gains that still doesn’t come to the level or personal income taxes.

    And again, ‘successful’ people like to argue that people on EI don’t WANT to be retrained, even though in most cases they never even got training.

    And everybody is an armchair economist, but I’ve known a LOT of successful people,and luck enters into it just as much as anything else. Successful people like to think that it is because of hard work and brains, but LOTS of people work hard and are smart, the reality is that that is simply not how the economy works. If you are in the right place at the right time with the right circumstances, then you will be sucessful. Most of the LAZIEST people I’ve ever met are wealthy people who call themselves ‘successful’ by virtue of the fact they have money.

    There are two sides to economic development, and if you are assuming at the outset that there are people who ‘don’t want to retrain’ and therefore deserve whatever life ends up throwing at them, then you are forgetting the prime motivation for economic development. And if enough people actually BELIEVE that, then they SHOULD be fought against and rejected-and fortunately they WILL be, and they will be left complaining on blogs and probably eventually will leave because things aren’t the way they like them.

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