Why does Tax always seem to punish the consumer. We all hate taxes but it could be win, win, win with a simple tweak.
I read an article today about the state of the NHS. It’s current budget is £130 billion a year, and cuts have to be made or taxes increased in order to maintain current levels of care.
The proposals by former Labour health minister Lord Norman Warner and Jack O’Sullivan, head of social policy consultancy are for a £10 monthly fee and ‘sin’ taxes; among a few other things, but here we’ll focus on ‘sin’ taxes and specifically on sugary treats.
The idea is to bring in ‘tougher’ taxes on tobacco, alcohol, sugary foods and drinks, and gambling.
The thought is that these ‘sins’ are a lifestyle choice, they’re not necessary, so if you can afford and choose to indulge in these lifestyle choices, you will pay towards the incredibly high running costs of the NHS.
If previous tax hikes are anything to go by, it seems they’re only looking one level deep. There is a far better way to implement these taxes that benefits everybody.
But first lets look at what happens to a tax increase on a chocolate bar; Let’s say it costs 65p they raise the tax taking the chocolate bar to 75p, we the consumer pay an extra 10p for exactly the same product which goes to the NHS fund.
This is one level deep. It’s the simplest, easiest most obvious way of ‘raising’ cash for the NHS, it doesn’t require as much thought as going two levels deep.
But what is the goal here? Is it simply to cover the costs the NHS has because we eat fatty foods? Because I don’t think a 6p increase would stop people eating chocolate, so a much bigger increase then?
Sure, it would stop me eating it (I think), but it’s still not the best answer (it’s still one level deep). After all it would decrease business revenue for sweet makers which in turn would decrease taxes paid out by those companies.
Put The Tax Burden On The Manufacturer And Make The Tax Amount Depend On Fat/Sugar/Badness Content
So the answer… Make the manufactures responsible for paying the tax increase and make that tax amount depend on the fat/sugar (sin) content. Or even better, the healthier the less tax, the naughtier and less natural the more tax.
We want healthy, natural food that tastes great with the occasional treat, not this food with strange additives, high sugar and salt content. Encourage the manufacturers to cut it out and encourage us to make the right choice.
We as consumers may still see an increase from the example of 65p to 75p as the company still wants to make at least the same profit, but now the onus is on the chocolatiers and sweet manufacturers to reduce the naughtiness.
This is going more than one level deep in my book because it’s serves more than just a short-term solution to problem, it serves as a long-term prevention to a problem. It’s win, win, win – it serves more than one purpose. Let me explain further…
The manufacturers win because it pays them to keep costs down, either to encourage more sales or to increase their profits, so they will look for ways to reduce taxes they pay, short-term they’ll put money into research (of alternative ways of creating sweet goods without health implications) for long-term tax savings.
Consumers win because we get healthier snacks – and before you say, ‘but I don’t want healthy, I want a treat if I wanted healthy I’d eat an apple.’ I’m saying that the treats would still taste great and be everything they are to you now, but without the bad bits. It would encourage research to be done in making healthier treats that still taste great.
And finally, the NHS wins, because it would still gain those taxes initially and eventually it would have less to deal with in terms of caring for our high cholesterol induced by sugary and fatty delights.
Of course the government will just add the manufacturers saved tax on to us to ‘recoup’ their ‘losses’ once the fat and sugar content is reduced, but it would at least mean healthier snacks and less strain on the NHS…possibly.
Admittedly that just covers one of the taxes mentioned and I haven’t thought about the others. I’d love to hear your thoughts and ideas on the other ways to rework other taxes to be more than one level deep.
I intentionally haven’t talked about the money wasted every year, I’m more interested in how we could rework taxes to be beneficial to our ultimate goal (all being healthier). Not a short-term solution to a problem but a prevention of that problem long-term.
I’d love to read your views, so post your comments and thoughts below.