We’re taxing the life out of pubs – it’s time to give them a break

Things haven’t been going to well for the British pub industry. Across the country, thousands of pubs have been forced to shut their doors by high alcohol taxes, duties, and other business-unfriendly restrictions from the state.  Even the extended summer and World Cup this year provided little solace to the struggling industry.

Beyond the pain caused by the closing down of local institutions, this also represents a huge threat to the UK economy. According to the Campaign for Real Ale (CAMRA), pubs contribute around £23.1 billion each year. That’s not to mention the community role pubs often play.

While the business environment might be tough, up to a third of the cost of a pint beer can be accounted for by taxation. In effect, the Government has been pushing both an economically and culturally valuable institution to the wall, preventing the British local from diversifying and competing in an ever-changing market.

It was only two years ago that that supermarket alcohol sales overtook those of pubs. On top of high duties, publicans were, and still are, up against businesses that can afford to treat alcoholic drinks as “loss leaders”; supermarkets, for instance,  are able to sell drinks at a loss since they can make up for it in the sales of other complementary products.

On top of this, pubs are facing threats from demographic and cultural changes, such as millennials drinking far less than previous generations, or the rise in preference for healthier lifestyles.

Now, I wouldn’t be much of a free marketeer if I didn’t argue that curveballs like the competitive edge held by supermarkets or preferences changing with demographics should be welcomed. Usually, it’s exactly this kind of disruptive change in competition and tastes that stimulates healthy growth and diversification.

Why, then, hasn’t this been the case? Why do so many pub owners simply lock up and sell off in the face of competition, rather than shaking things up to meet new tastes and trump competition from stores?

The first reason may seem pretty obvious: it’s just not worth it. Selling beer to an ever-more-teetotal generation is hard enough without without having to raise the cost of a pint just to meet the tax requirements. With such high costs imposed by the state, and with a smaller consumer market to support them, it’s simply too expensive and risky for landlords to invest in trendier gimmicks for their pubs that might appeal to the new base.

Thankfully, it seems that this message has not gone unheard. In his Budget on October 29, Philip Hammond, the Chancellor, froze duties on beer, spirits, and most ciders and announced a review of the current relief offered to small brewers. Such decisions will make life far easier for pub owners and brewers alike; Brigid Simmonds, Chief Executive of the British Beer and Pub Association, claimed that the freeze will “save brewers, pubs and pub-goers £110 million and secure upwards of 3,000 jobs that would have been lost had beer duty gone up.”

Moreover, the budget also offers to cut the business rates paid by small businesses (including pubs and bars) by a third. Like the frozen duty on beer and spirits, this is a policy that will be warmly welcomed by pub landlords across the country, who will now have more financial freedom to revamp their businesses, and experiment with new gimmicks and trends that can appeal to the new market.

But the focus should be on more than just a disaster averted; freezing duties and cutting business rates is great first step towards a more competitive, revitalised pub industry, but there are certainly more steps to be taken.

For example, policies such as cumulative impact zoning (CIZ), which enables local councils to reject license applications on the basis of alcohol-related harm reduction and local protection from disorderly patrons, make it harder for entrepreneurs to establish new pubs in areas where demand might call for them. With this policy being introduced with the Licensing Act of 2003, it’s high time for an update.

Rather than punishing pub landlords ex ante for crimes they assume their future patrons will commit, the state should instead relax and allow pubs and local communities to shape their own environment. It isn’t fair to simply assume a pub will bring crime and disorder, especially with the aforementioned sensible drinking habits of millennials.

In any case, we can accept this year’s budget as a win for the pub industry, who can now breathe a little easier with their belts loosened. However, if we really want to save the local, we have to constantly be searching for ways to give owners and entrepreneurs more freedom to set up shop and shake up the traditional model of the pub to fit the new generation.

Originally published at https://www.telegraph.co.uk/politics/2018/11/09/taxing-life-pubs-time-give-break/?WT.mc_id=tmgliveapp_iosshare_ArjsbDjFcR1w

European customers would suffer from proposed EU rice duties

Core Tip: The Italian government has asked the European Commission to employ the safeguard clause on rice imports from Cambodia and Myanmar in order to “protect Italian rice growers”.

The Italian government has asked the European Commission to employ the safeguard clause on rice imports from Cambodia and Myanmar in order to “protect Italian rice growers”.

However, Luca Bertoletti, European Affairs Manager of the Consumer Choice Centre, criticised the request and said that it’s time the European Union stopped pushing forward protectionism.

“The reasoning behind trade barriers is to protect a specific industry – in this case Italian rice growers – from competition,” he said.

“What’s usually overlooked though is that whilst taking the producer side, protectionist policies end up causing a great harm to consumers who get stripped of the opportunity to enjoy the benefits of free trade.

“The Italian government is simply asking to limit the affordability of rice.”

He added: “The Association of South East Asian Nations (ASEAN) is the third largest trading partner of the EU. In 2017, co-operation with the ASEAN resulted in the output of more than € 227,3 billion in goods.

“As part of this economic engagement, the European Union has been actively trading with both Myanmar and Cambodia and therefore using the agricultural imports, in particular rice, to feed up the EU market.

“Before employing another protectionist measure, the European Commission should ask itself whether it wants to ensure European consumers are able to enjoy a great supply of rice and consequently a favourable pricing or whether it is the unwillingness of one group to compete which matters more.”

mm

About Luca Bertoletti

Luca graduated with a degree in Political Science from the University of Milan in December 2014. He worked as a Business Economics Analyst for the Italian magazine TheFielder in Milan and as Think Thank Coordinator for the Austrian Economics Center in Vienna. He is a fellow of Competere Institute in Rome, a columnist for Atlantico Quotidiano, and he sits on the scientific board of New Direction Italia. He has been featured in the New York Times, Radio RAI, RAI 1, El Economista, The National and many other newspapers.

Canadians getting soaked by hidden booze taxes

Federal ‘escalator tax’ effectively hides annual increases, removing discussion from the democratic process

Doug Ford’s “Buck A Beer” proposal has made alcohol regulation a topic of discussion again. Many working class Ontarians praise Ford’s move, even as just a gesture, because it showed consumers that help was on the way to stop rising prices.

Although “Buck A Beer” was designed to give consumers some relief, Premier Ford still plans on increasing Ontario’s beer tax, and has been rightly criticized for it. On Nov. 1, the tax on draft and non-draft beer will increase by three cents per litre, nearly a 10 per cent increase.

That said, there is another, much larger, discussion to be had when it comes to alcohol policy, specifically the federal government’s escalator tax on beer, wine, and spirits. Most consumers don’t know that 47 per cent of the price of beer goes directly to government.

When we look at spirits, that figure is even more astonishing: 80 per cent of the price of a bottle of spirits is tax. What makes these figures more troubling and worrisome for consumers, is that due to the federal government’s alcohol escalator tax, the tax on all alcohol will automatically increase each and every year, forever.

The escalator tax will mandate that the sin tax on alcohol increases, at a rate indexed to inflation, each year on April 1, regardless of who is in office.

The impact of this tax will obviously disrupt brewers and distillers who make these products, but more importantly, it will impact consumers, and disproportionately harm low-income consumers. For those low-income consumers, perpetual tax increases mean each and every year they will have to spend more on these products. For many, this seems like cruel punishment for the crime of wanting to enjoy an alcoholic beverage and socialize, or relax.

Comparing how alcohol is taxed in the United States rubs salt in the wound for Canadian consumers. For the average American, buying a case of beer has $4.12 in taxes associated with it. For the average Canadian, the tax paid on that same case of beer is over five times higher, at $20.31. The federal tax rate on beer in Canada is 2.8 times higher than in the United States, while the average provincial tax rate is over six times higher than the average U.S. state tax rate.

The same is true for excise duties for spirits. The excise tax rate on a bottle of spirits in Canada is 83 per cent higher than the tax rate in the United States. While taxes go up on Canadians, our American friends are having their tax burden reduced. It’s pretty clear that Canadian consumers are getting a raw deal when it comes how our government treats us.

Those who support these sin taxes support them for two reasons. The first is the claim that higher taxes will discourage consumption. The second is that increasing taxation will increase government revenues. But these reasons contradict each other. If sin taxes discourage use, then obviously government revenue won’t increase. If sin taxes don’t discourage use, then the tax is nothing more than a tax grab. Advocates on the other side of this issue have been simultaneously perpetuating these contradictory justifications, and no one has called them out for it.

At the end of the day we are talking about adult consumers, and adult consumers deserve to be treated with respect, as adults. Before any new taxes are introduced, consumers should be consulted, or at the very least given the opportunity to vote for politicians who either are in favour, or oppose, new taxes.

The escalator tax removes that discussion from the democratic process and eliminates consumers from the discussion all together. The government needs to stop its hammering away at the disposable incomes of Canadians, and let adult consumers enjoy these products in a responsible way.

David Clement is the North American Affairs Manager for the Consumer Choice Center. Follow him on Twitter at @ClementLiberty

Originally published at https://www.stcatharinesstandard.ca/opinion-story/8942846-canadians-getting-soaked-by-hidden-booze-taxes/

mm

About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Canadians getting soaked by hidden booze taxes

Federal ‘escalator tax’ effectively hides annual increases, removing discussion from the democratic process

Doug Ford’s “Buck A Beer” proposal has made alcohol regulation a topic of discussion again. Many working class Ontarians praise Ford’s move, even as just a gesture, because it showed consumers that help was on the way to stop rising prices.

Although “Buck A Beer” was designed to give consumers some relief, Premier Ford still plans on increasing Ontario’s beer tax, and has been rightly criticized for it. On Nov. 1, the tax on draft and non-draft beer will increase by three cents per litre, nearly a 10 per cent increase.

That said, there is another, much larger, discussion to be had when it comes to alcohol policy, specifically the federal government’s escalator tax on beer, wine, and spirits. Most consumers don’t know that 47 per cent of the price of beer goes directly to government.

When we look at spirits, that figure is even more astonishing: 80 per cent of the price of a bottle of spirits is tax. What makes these figures more troubling and worrisome for consumers, is that due to the federal government’s alcohol escalator tax, the tax on all alcohol will automatically increase each and every year, forever.

The escalator tax will mandate that the sin tax on alcohol increases, at a rate indexed to inflation, each year on April 1, regardless of who is in office.

The impact of this tax will obviously disrupt brewers and distillers who make these products, but more importantly, it will impact consumers, and disproportionately harm low-income consumers. For those low-income consumers, perpetual tax increases mean each and every year they will have to spend more on these products. For many, this seems like cruel punishment for the crime of wanting to enjoy an alcoholic beverage and socialize, or relax.

Comparing how alcohol is taxed in the United States rubs salt in the wound for Canadian consumers. For the average American, buying a case of beer has $4.12 in taxes associated with it. For the average Canadian, the tax paid on that same case of beer is over five times higher, at $20.31. The federal tax rate on beer in Canada is 2.8 times higher than in the United States, while the average provincial tax rate is over six times higher than the average U.S. state tax rate.

The same is true for excise duties for spirits. The excise tax rate on a bottle of spirits in Canada is 83 per cent higher than the tax rate in the United States. While taxes go up on Canadians, our American friends are having their tax burden reduced. It’s pretty clear that Canadian consumers are getting a raw deal when it comes how our government treats us.

Those who support these sin taxes support them for two reasons. The first is the claim that higher taxes will discourage consumption. The second is that increasing taxation will increase government revenues. But these reasons contradict each other. If sin taxes discourage use, then obviously government revenue won’t increase. If sin taxes don’t discourage use, then the tax is nothing more than a tax grab. Advocates on the other side of this issue have been simultaneously perpetuating these contradictory justifications, and no one has called them out for it.

At the end of the day we are talking about adult consumers, and adult consumers deserve to be treated with respect, as adults. Before any new taxes are introduced, consumers should be consulted, or at the very least given the opportunity to vote for politicians who either are in favour, or oppose, new taxes.

The escalator tax removes that discussion from the democratic process and eliminates consumers from the discussion all together. The government needs to stop its hammering away at the disposable incomes of Canadians, and let adult consumers enjoy these products in a responsible way.

David Clement is the North American Affairs Manager for the Consumer Choice Center. Follow him on Twitter at @ClementLiberty

mm

About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Germany is delaying the adoption of the google tax and thats a good thing

While France and Spain are heavily lobbying for the adoption of a “GAFA” tax (Google, Amazon, Facebook and Apple), also known as “Google tax”, Germany has chosen a more careful approach. Rightfully so.

French finance minister Bruno Le Maire began his move towards what was then known as a “digital tax” (now also called “tax on digital presence”, for mere accuracy) in autumn last year. Le Maire had run a centre-right primary campaign for France’s Republican party as a fiscal conservative, but seems to have found the social democrat within him since he joined Macron’s government.

Describing it as a matter of “fairness”, France’s finance minister Bruno Le Maire has called for European unity on this issue. During the Estonian presidency of the European Union, Le Maire gathered finance ministers to gain support for the proposal.

However, ministers from Denmark, Sweden, Malta, Ireland, or Luxembourg quickly showed opposition, suggesting that such an idea should be taken up at the OECD level. Critics claim that the move could be seen as a further punishment on U.S firms, as most companies affected would be American.

Back in September 2017, Danish finance minister Kristian Jensen said: “I’m always sceptical about new taxes and I think that Europe is taxed heavily enough.” Malta’s finance minister Edward Scicluna expressed his hopes that “this is not another financial transaction tax”, knowingly that he publicly and vehemently opposed the latter as a member of the European Parliament.

Luxembourg’s Pierre Gramegna showed more initial opposition, which has since drowned out: a move that could be related to Luxembourg Prime Minister Xavier Bettel’s ambition to an EU top job after the Grand-Duchy’s election next month.

In administrative court rulings in July 2017, the tech success story Google had escaped a €1 bn bill by the French taxman. The court had ruled that the U.S company could not be taxed on the activities of its service AdWords, since it has no “permanent establishment” in France. This is what sparked the original reaction in Paris, which is now, given the proximity of the European elections in May, even more pressing for the government.

In an attempt to vouch for the tax which seemed rather desperate, French minister Bruno Le Maire brought up Emmanuel Macron’s win against the far-right in France, as a reason to accept the reform.

In any way, this bargaining tactic could drive up one bill, and that is the one of the European Consumer. Very often, increases in company expenditure in indirect taxes, which this would inevitably imply, would raise prices for consumers around the continent. VAT has long been recognised as the tax which hits poor people the hardest, yet many EU countries now prefer to introduce higher levels of indirect taxation.

Just at a time when especially low-income earners can have simpler access to many products because of the internet, it seems cruel to restrict their purchasing power.If people such as Bruno Le Maire want to talk about fairness, then they should first address the unfair situation of those people who cannot support indirect tax increases. If we care about those with low wages, we need a more competitive marketplace in which companies are in a price race, not a race to optimise astronomical tax burdens.

Meanwhile, German finance minister Olaf Scholz is now known to be deliberately delaying the progress of the tax. A confidential document from the German Federal Ministry of Finance, which is quoted by the German newspaper BILD, condemns the “demonisation of the large internet companies”. This has supporters of the tax up in arms, because of course, opposing an idea that they just came up with a year ago must mean that a person is owned by big digital.

Scholz is not even delaying it to avoid because he disagrees with it on principle, as his social democrat party affiliation would probably suggest, but more by pragmatic considerations. German carmakers could suffer from retaliatory tariffs from the U.S, if president Trump were to see the tax as an attempt to increase the level of European protectionism. After all, EU leaders are constantly using the fact that there is no European Google, Apple, or Facebook, continuously in their statements.

It is unlikely at this point that any agreement can be reached until the European elections in May, and that is also thanks to the delays be minister Scholz. The future of Europe’s market economy undeniably lies in the digital sector. The idea of attempting to massively tax online businesses is not a promising objective, neither for the states nor their consumers. It belongs in the dustbin of creative political EU integration.

Originally published at https://www.vocaleurope.eu/germany-is-delaying-the-adoption-of-the-google-tax-and-thats-a-good-thing/

mm

About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.

Contrary to Trump, the Postal Service needs Amazon

WASHINGTON EXAMINER: The antagonism Trump is showing to Amazon is profoundly misplaced, and if his attacks on Amazon lead to antitrust action, this could spell the death knell for many innovative businesses that have come to depend on the company.

READ MORE

mm

About Ryan Khurana

Ryan Khurana is a Research Fellow at the Consumer Choice Center and at the Institute of Research in Economic and Fiscal Issues. He investigates the economics of technology, especially the impacts of the "gig economy" and Artificial Intelligence. His writings have been featured in CapX, The Huffington Post, and Rare, among others.

Letter to the Utah House Revenue and Taxation Committee on HB 88

Dear Chairman Eliason and members of the House Revenue and Taxation Committee,

I received thoughtful feedback from many of you after I wrote to you last month to share my concerns that H.B. 88 (Electronic Cigarette and Other Nicotine Product Amendments) would harm Utah consumers (especially the most vulnerable), local businesses, and provide no countervailing benefit to the broader public or to the treasury.

I was pleased that some of you shared my view that this attempt to create additional tax revenue does not justify the negative ramifications it will have for your constituents. You understand that any excise tax on lower-risk alternatives to combustible cigarettes would make it harder for your constituents to quit smoking. But this 86% tax proposal is particularly unwise as it would guarantee an expansion of the black market while harming responsible businesses in your community.

Some of you also sought a better understanding about whether e-cigarettes are indeed helping adult smokers quit, and the impact of e-cigarettes on youth, who we all agree should not use any nicotine products, including e-cigarettes.

I wanted to share some recent developments that add to the substantial evidence that suggests that e-cigarettes should be regulated, but with caution, given their potential to help adult smokers quit.

Yesterday, the American Cancer Society, which had been a strident opponent of e-cigarettes, announced an important change in course.  Without dismissing concerns about youth, ACS now recommends “that clinicians support all attempts to quit the use of combustible tobacco and work with smokers to eventually stop using any tobacco product, including e-cigarettes.  Some smokers, despite firm clinician advice, will not attempt to quit smoking cigarettes and will not use FDA approved cessation medications.  These individuals should be encouraged to switch to the least harmful form of tobacco product possible; switching to the exclusive use of e-cigarettes is preferable to continuing to smoke combustible products.”

Additionally, although there are certainly differences between the populations in Utah and the U.K., this month’s Public Health England’s updated comprehensive review is instructive. In describing the analysis, their tobacco control program lead wrote, “Our report found no evidence so far to support the concern that e-cigarettes are a route into smoking among young people. UK surveys show that young people are experimenting with e-cigarettes, but regular use is rare and confined almost entirely to those who already smoke. Meanwhile, smoking rates among young people in the UK continue to decline. 

He added that, There is currently no evidence to suggest that e-cigarettes are encouraging people to continue smoking – the picture in the UK suggests the opposite. The proportion of e-cigarette users who are ex-smokers has been increasing over recent years. Of the 2.9 million adult e-cigarette users in the UK, more than half have completely stopped smoking. A further 770,000 have given up both smoking and vaping. At the same time, quit success rates have been improving and we’re seeing an accelerated drop in smoking rates, currently at a record low of 15.5% in England.

I have faith that the public health community, legislators, and responsible local businesses can work together to prevent youth use of e-cigarettes without unnecessarily harming adult smokers and Utah businesses, so many of whom are diligent in not allowing minors to even enter their premises. It is evident that youth who use e-cigarettes attain them from illicit businesses and other sources. This tax would do nothing to address that problem.

Sincerely,

Jeff Stier Senior Fellow, Consumer Choice Center

@JeffAStier

February 21, 2018

mm

About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center. Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts. Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Eine Digitalsteuer wäre nur eine weitere Steuer, die dem Verbraucher schadet

PEACE LOVE LIBERTY MAGAZIN: Online-Dienste könnten zukünftig auf ihren Umsatz besteuert werden, nicht auf ihre Gewinne. Neben den Finanzministern aus Frankreichs, Deutschlands, Italiens und Spaniens fordert jetzt auch der Ratsvorsitzende aus Estland eine solche Steuer.

READ MORE

mm

About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.