Dutch Plans of an EU-wide Air Passenger Tax won’t fly High with Consumers

Last month, the Dutch government began circulating a position paper suggesting the EU should introduce a Union-wide air passenger departure tax on flights departing from the European Union. The paper promoted by the Netherland’s Secretary of State for Finance Menno Snel suggests a 7 EUR per passenger flight tax be rolled out within all Member States. Then, the funds should be allocated to the national budgets of the respective airport of departure. Snel argues that this tax would ‘disincentivize passengers from frequently using low-cost’ carriers and make more Europeans switch to trains.

While France, Belgium, and Finland support this initiative to create an EU-wide tax, passengers should be worried about this massive fiscal intrusion of tax authorities in the daily choices of consumers. Several European countries already have hefty air passenger departure fees.

The United Kingdom’s Air Passenger Duty ranges between 13 and whooping 150 GBP for each flight, pushing many Brits to take the train to take flights elsewhere, often Brussels or Paris.

The German Luftverkehrabgabe ranges between 7 and 42 EUR and has decreased in the past years. The Netherlands had a similar tax over a decade ago and got rid of it as passengers were commuting to nearby airports in Germany and Belgium. That move ushered in a loss of up to one billion Euros to the Dutch airline economy.

Looking at the map, one sees that mainly wealthy Northern European countries have introduced such taxes but not a single Eastern European country, save for southern Italy. The liberalization of air travel within Europe and the emergence of low cost carriers and massive competition within the airline industry have allowed millions of European to use planes for either leisure or economic activities.

Economic migrants and commuters from Eastern Europe can visit their families more often and more cities are connected to the rest of the continent. Assuming that a European tax would move more of these travel patterns to the rail neglects the realities of European rail networks and actual distances to travel. Passengers flying from Bucharest to Brussels will hardly be able to use buses or trains for this journey.

More remote European countries such as Bulgaria, Greece, Portugal, or Spain would also suffer from such a mandatory air passenger tax. Given that many of the countries without an existing tax rank below the average EU income, its introduction would over-proportionally hit low income households and families. Rich western EU Member States mandating high taxes on emerging economies seems to be a recipe for discord. The EU28 has nearly 1.5 billion departing air passengers a year. The Dutch plans would cost European consumers 10 billion Euros a year and likely ground many Europeans’ plans to visit friends or study abroad.

Countries with this tax usually saw a reduction of passenger numbers between 1 and 2 percent. This means not just that many passengers won’t be able to afford air travel anymore, but it may also be the nail in the coffin of many struggling European airlines.

In times of rising populism and many European economies being at the brink of a new recession, policy makers should instead focus on how to underscore the value of the Single Market and the European Union.

Introducing Union-wide taxes and limiting consumers’ choice and purchasing power is not the right way to win back the hearts and minds of people.
 

By Fred Roeder, Managing Director of the Consumer Choice Center

Originally published at https://ftn.media/dutch-plans-eu-wide-air-passenger-tax-wont-fly-high-consumers

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About Fred Roeder

Fred Roder has been working in the field of grassroots activism for over eight years. He is a Health Economist from Germany and has worked in healthcare reform and market access in North America, Europe, and several former Soviet Republics. One of his passions is to analyze how disruptive industries and technologies allow consumers more choice at a lower cost. Fred is very interested in consumer choice and regulatory trends in the following industries: FMCG, Sharing Economy, Airlines. In 2014 he organized a protest in Berlin advocating for competition in the Taxi market. Fred has traveled to 100 countries and is looking forward to visiting the other half of the world’s countries. Among many op-eds and media appearances, he has been published in the Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Die Welt, the BBC, SunTV, ABC Portland News, Montreal Gazette, Handelsblatt, Huffington Post Germany, CityAM. L’Agefi, and The Guardian. Since 2012 he serves as an Associated Researcher at the Montreal Economic Institute.

Taxing Sugar and Salt Hurts the People it Aims to Help


By Thomas Walker

Following the introduction by the British government of a tax on sugary carbonated drinks in April 2018, intended to improve public health and combat obesity in children, some campaigners have started calling for similar taxes on a wider range of products.

NHS Chief Medical Officer Prof. Dame Sally Davies, described by the BBC as ‘Britain’s top doctor’, has called [1] for a tax on foods high in salt and sugar, as well as widening the current sugar tax to other types of drinks. The revenue from these taxes, she proposes, would go towards making fruit and vegetables cheaper for the consumer.

Dame Sally makes reference to children and low-income communities as the main beneficiaries of these taxes. Obesity, she says, is a “matter of inequality” that disproportionately affects poorer children and adults. She and others like her hope to make people healthier by discouraging the sale and consumption of unhealthy foods whilst encouraging healthier alternatives.

The most obvious problem with this reasoning is that low-income consumers are the ones who will be hit hardest by the tax. Personal habits, as Bake-off winner Nadiya Hussain points out in her amusing take on the sugar tax [2], are hard to break. Many, if not most, consumers will continue buying the same products as before at the new higher prices, leaving them with even less disposable income to spend on other things.

The fact that the current sugar tax managed to raise £154 million in extra revenue for the government in just six months is suggestive of the reality that consumer habits aren’t changing. In seeking to improve the lives of poorer children and adults the tax has instead simply left them with less money. Expanding the tax to other food and drink products is going to have a proportionately higher financial impact on the poorest people in the country.

Many soft drinks providers have tried to get around the tax by using alternative sweeteners in their products. This may seem like a good solution on the surface, but in reality it can end up being even more harmful. 

The popular sugar substitute aspartame, used in many of these products, has been accused of causing weight gain in consumers by increasing the body’s appetite for it and other sweet foods. It’s possible that artificial sweeteners could ultimately be worse for consumers’ health than the natural sugar they replace.

Expanding the use of alternative sweeteners to other foods and drinks would lead to a huge increase in their consumption at a time when their effects and benefits are still the subject of considerable debate.

Another issue with artificial sweeteners is the difference in taste that can result. Some providers, notably Lukozade, have seen a backlash from consumers over the change in the taste of their products following the introduction of the tax. This can also hurt sales and potentially put companies and jobs at risk.

The issue of taste leads into another significant, but often understated, problem with discouraging sugary food: the effect on people’s happiness. People consume these products because they enjoy them, and for many people that’s done in moderation as part of a balanced overall diet. It’s unreasonable to tell the sensible majority that they have to pay more for their favourite products, or have them fundamentally altered, because of a minority who consume them in excess. 

For children this is particularly pertinent. Sweet drinks and food are an important part of childhood; they create a lot of excitement and make effective rewards for good behavior. But even for adults, energy drinks, sweet snacks and salty foods play an important role in providing moments of relief and pleasure. 

Proponents of these taxes argue that their purpose is to improve the health and wellbeing of people, particularly poor people and children. The reality, however, is that they can end up causing more harm than they prevent in other ways. Wellbeing is not simply a question of diet, but also one of happiness, financial wellbeing and overall quality of life. The people best placed to make balanced decisions about improving their overall wellbeing are the people in question themselves, not the government.

If individual wellbeing is really what the government is interested in promoting, then taxes are not the tool through which to achieve it. Education and information are likely to be far more effective in changing consumer behavior without harming people in other ways. If the government really wants to help people, and isn’t just looking for an easy source of revenue, then they should trust consumers to make their own choices in their own interests, while campaigners should focus their efforts on informing and educating the public to help them make those choices.

[1] https://www.bbc.co.uk/news/health-46636422 – Tax junk food high in sugar and salt, says top doctor 

[2] https://www.bbc.co.uk/news/entertainment-arts-44417509 – Nadiya Hussain on the sugar tax, takeaways and Bake Off adverts

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

Originally published at https://www.spiked-online.com/2019/01/28/sin-taxes-are-taxes-on-the-poor/

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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.

The fallacy of the meat tax

Bill Wirtz examines the shortcomings of the proposed tax on red meat.

In a recent publication for the University of Oxford, Dr. Marco Springmann and James Martin, both Fellows at the Oxford Martin School argue for the introduction of additional taxes on red meat. Springmann makes the case that taxing products such as bacon could save thousands of lives every year, due to the meat’s association with higher chances heart disease, stroke, and Type 2 diabetes.

Most striking is the regressiveness of a meat tax. All too often, the people suggesting these taxes are not the ones most affected by them. Even if a red meat tax were introduced, “public health advocates” could still afford as much meat as they choose to pay for. That is not the case for the poorest in society. Like for any other consumption tax, it’s the poorest who are most affected by the measure compared to higher earners. Unless we are sympathetic to the idea that the poor should be more overprotected than those that high-income earners, a meat tax would be socially unjust.

It’s saddening that in a world where paternalism is taking over, there is a need to defend one thing: consumers should be allowed to enjoy themselves. Yes, they should be made aware of the health risks associated with their lifestyles, but ultimately it should be up to the individual to choose for themselves what they want to eat. If not, then it won’t end there: once consumers give up red meat, proponents of the Nanny State will just find a new angle through which they trample upon enjoyment. At least today, if you’re looking to live to 120 and be boring, you can do it without impeding on the free choices of others.

But we should not only quarrel with the principle, but also with the statistics.

The essential claim is that processed meat is a danger to public health, as it is associated with an increased risk of cancer. The “associated with” are quite the important key words here, especially since they are being repeated so often. Everything you consume is essentially carcinogenic, and can therefore be linked to different cancers. The question is how dangerous it is exactly. The study Springmann bases his claims on is a 2011 meta-analysis from the Paris Institute of Technology for Life, Food and Environmental Sciences, which says this:

“The preventability of colorectal cancer in theUnited Kingdom through reduced consumption of red meat, increased fruit and vegetables, increased physical activity, limited alcohol consumption and weight control was estimated to be 31.5 per cent of colorectal cancer in men and 18.4 per cent in women.”

You may have noticed here that reducing red meat consumption is just one out of five key characteristics that people would have to follow in order to cut down their risk of colorectal cancer by up to a third (for men). If you narrow it down only to red meat consumption, you find a possible risk reduction in the UK of five per cent, provided the person was eating more than 80g of red meat per day. So yes, certain people can reduce their risk of certain cancersto a certain degree if they limit their consumption of red meat.

However, this is only true if people reduce their consumption of red meat without offsetting it with any other consumption.

It seems that there is an unfortunate disinterest of public health advocates for the occurrence of unintended consequences. If you limit access to one product, people are likely to find alternative routes to consume that product elsewhere. Take the example of Denmark’s fat tax, introduced in the same year that the Paris meta-analysis was published. In October 2011, Denmark’s leading coalition introduced a tax on fattening foods and beverages, such as butter, milk, cheese, meat, pizza, and oil, as long as they contain more than 2.3 per cent saturated fat. After fifteen months, the same parliamentary majority repealed the tax, as the Danes recognised the measure to be a failure.

Still, a study in the European Journal of Clinical Nutrition suggests that in the months during the implemented tax, the sale of these foods fell by between 10 and 15 per cent. But, this does not account for the stockpiling or hoarding effect that the Danes experienced prior to the introduction of the tax: in fact, when analysing the effects over the 15 months during which the tax was in effect in Denmark, we saw a marginal drop of 0.9 per cent in consumption of fatty foods and beverages, which lies within the margin of error.

What exactly British consumers will do when presented with a massive tax hike on red meat is hard to tell at this point, but it certainly isn’t as clear-cut as public health advocates would like it to appear. The fact that they don’t account for possible unintended consequences shows more of an activist behaviour than one of scientific research.

Originally published at http://commentcentral.co.uk/the-fallacy-of-the-meat-tax/

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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.

Life as a taxpayer: paying to be berated

The EU’s 2018 NGO Health Awards took place this week where the European Commission recognised those NGOs it deems to be the most effective in fighting the use of tobacco. Bill Wirtz watched what he describes as “an insufferable nanny state love-in”, so you don’t have to. 

At the beginning of the EU Health Policy Platform annual meeting, Vytenis Andriukaitis, European Commissioner for Health and Food Safety, held an energetic speech against the practice of smoking tobacco. He pointed out that he believes the idea that harm-reduction through e-cigarettes, as it is currently practiced in the UK for instance, is nonsense. He doesn’t seem bothered by the facts. Public Health England found as early as 2015 that e-cigarettes are 95 per cent safer than traditional cigarettes. If the Lithuanian Commissioner really wanted to reward those who get people to stop smoking, he’d give the prize to the companies that produce e-cigarettes or heat-not-burn products, both have which have proven to considerably reduce health risks and contribute to smoking cessation.

Instead, three anti-smoking NGOs, subsidised by public money, received the prizes. The third prize went to Youth Network No Excuse Slovenia, a youth organisation dedicated to the cause of fighting tobacco. “No Excuse” prides itself with the fact it “operates independently from private financiers”, meaning it is entirely funded by taxpayers’ money.

“No Excuse Slovenia” received £71,000 from the Slovenian government in the last three years. It is also hiring people with money from both the European Union’s Social Fund and the Slovenian government. “No Excuse Activists”, an associate program run by the same people, received £592,000 in the last ten years. The organisation is a member of the European Public Health Alliance (EPHA), which for the last three years has cashed in £1.5 million of taxpayers’ money through EU funds. The EPHA calls for higher taxes on tobacco products or for even larger health warnings . These are things that the EU could perfectly well argue independently, but it instead chooses to give your money to NGOs who then lobby Brussels which results in everyone having to pay more tax.

The second place went to Education Against Tobacco (EAT), a group of medical students actively promoting tobacco cessation to students. EAT’s website doesn’t ask for donations and doesn’t present any financial statements, which is why it’s safe to assume that the group is funded by university grants.

Lastly, the winner of the EU health award is the Irish Cancer Society (ICS). The ICS prides itself on being an organisation that operates independently of the Irish government, but is quick to admit that it does cooperate with it, i.e. it receives grants to run things like smoking cessation hotlines. If you think that that is trivial, look at it this way: if the Prime Minister publicly claimed that he did not receive money from Coca-Cola, and then went on to say that the Coca-Cola Company only funds specific expenses, such as her holidays, we’d probably still have some questions. Any accountant will tell you that funds are fungible.

The problem isn’t that people advocate against smoking tobacco. That is their prerogative, just as much as people can argue against the consumption of alcohol. After all, alcohol, as opposed to tobacco, can lead to car accidents, public nuisance, physical altercations, or domestic violence. Tobacco is the thin end of the wedge. On the day that the last person lays down their cigarette, the same activists will come for your whisky, wine, and beer. When looking at public health policies, we see that that is already largely the case. What will be next: an 80 per cent tax on beer, a ban on drinking in pubs? After all, I could give you a long list of avoidable consequences if those measures were introduced.

The problem is, however, that taxpayers’ money is wasted on activists who say exactly what the government wants them to say. There’s is a fundamental dishonesty in what the government does: instead of making a political declaration, writing it in the manifesto, and standing for election with the promises in it, politicians now choose to avoid these issues completely in the times of election, and instead fund “non-governmental organisations” that get their funding from the government, who then give their “expertise” in committee hearings. Instead of standing their ground, politicians hide behind an army of anti-choice lobbyists working for the same government they try to influence. In political jargon you’d call it: civil society representatives providing insights and perspectives to elected officials for the purpose of informed policy-making.

All that is then rounded up with ceremonial award procedure and a cocktail lunch you paid for. But don’t worry, you can still watch the live stream.

Originally published at http://commentcentral.co.uk/life-as-a-taxpayer-paying-to-be-berated/

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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.

Minority leaders in Philadelphia speak up against the soda tax

As the Consumer Choice Center has been keen to point out in several articles and campaigns, additional taxes and levies on sugary drinks end up being regressive and hurting the very people they aim to help: minorities and the poor.

Now, minority leaders in Philadelphia, seeing the toll the taxes have had in their communities, are calling on the city to repeal them.

As reported in the Philadelphia Inquirer, black clergy leaders say the taxes are disproportionately hurting African Americans and the poor in the city.

“I don’t see how the tax, as it is constructed, can really effectively do what it is intending to do. We think it needs to be repealed and reconceptualized,” said the Rev. Jay Broadnax, president of the Black Clergy of Philadelphia and Vicinity.

Last year, Cook County, which includes Chicago, got rid of its unpopular 1-cent-an-ounce soda tax that its commissioners passed in November 2016 affecting 5.2 million residents.

The Philadelphia pastor said the 1.5-cent-an-ounce levy on sugary beverages, including diet soda, was having unintended consequences by saddling people of color, the poor and senior citizens with higher grocery bills, while dips in soda sales were hurting small neighborhood business owners.

“The way that it has worked out is that it seems to be hurting more than it’s helping,” Broadnax said.

When Philadelphia passed its soda tax in 2016, it was the largest U.S. city to implement such a fee. After the tax was implemented, shoppers chose to cross the city limits to purchase their sugary drinks, something we have also seen in places like Seattle and Chicago.

Former New York Mayor Michael Bloomberg, the architect of soda tax campaigns across the country, spent over $1.6 million in Philadelphia alone to help pass the tax. During that year, he also dropped $18 million in Oakland and San Francisco.

As I pointed out in my Washington Examiner article last year, Bloomberg is no doubt driven to do good. But whether soda taxes are the tool to help reduce obesity remains to be seen.

Though Bloomberg’s project represents a noble goal – reducing childhood and adult obesity – its actual impact is to make already low-income people poorer, and hasn’t yet produced any clear results on obesity.

In the case of Mexico, the largest jurisdiction which passed a tax on sugar-sweetened sodas in 2014, it’s quite clear that sales of sodas dropped as a result of the tax.

However, as Mexican researchers learned once they broke down the figures, low-income households paid a higher proportion of the soda taxes overall.

This likely means that soda taxes deterred higher-income individuals from buying and consuming soda, but not lower-income individuals: those who the government was originally trying to help. What’s more, it seems those who stopped purchasing sodas switched to alternatives with just as many calories, such as fruit juices or energy drinks.

That would mean the tax was at best a source of revenue for the national government, and at worst, a fierce killer of local shops and commerce.

An economic survey of the effect of the tax found that more than 30,000 Mexican stores which sold sodas were forced to close in the first half of 2016.

In Washington State, campaigners were successful in passing a ban on local grocery taxes. In large measure, this ban will ensure localities cannot pass their own taxes on ordinary goods Americans purchase at the store: meats, beverages, produce, dairy, grains, and more.

As such, Washington residents should be both proud and relieved. They won’t be seeing their grocery bills climbing any time soon, and that’s because they voted with their wallets on Election Day.

Whether policymakers at the city level will see the harmful effects of passing such taxes, however, remains to be seen. If they listen to the leaders in Philadelphia and other jurisdictions, they will think twice.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

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.”

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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/

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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.