Double the tax on spirits!

A bottle of Bells whisky could rise from £14.79 to £23.73 while Gordon\’s gin, another favourite of middle-class drinkers, would increase from £12.79 to £21.17.

Hmm….three reasons being given for this. The first is to \”curb binge drinking\”. Yes, I too have seen the gin and tonic set rioting and vomiting in the streets.

The second is to raise money. Yes, there really is a Laffer Curve and yes, it applies to excise duties just as much as to any other tax. I\’d simply love to see the calculations that people have done on how much extra revenue this might raise. Especially in a country where it is entirely legal, indeed, it\’s a legal right, not just a permission that can be withdrawn, to purchase alcohol in other lower tax jurisdictions (one of which is only 26 miles away, accessible by £1 return trip ferry deals at times) and bring it home to drink. The third though is much, much, more fun:

MPs called for a return to the level in 1983 when the duty on a litre of pure alcohol was 11 per cent of the average male weekly manual wage, compared with 5 per cent in 2002.

OK, so, there\’s something magical about tax rates as they were in 1983 as a percentage of the average male manual wage. Quite what it is I\’m not sure but let\’s run with that.

So what is the implication that all tax rates should be such? I think you\’ll find that the personal allowance would have to rise substantially, that the NI contributions limit would have to rise substantially as well. Council tax would need to fall…there\’s been, even over those 25 years, really a very large movement in taxes as a result of fiscal drag.

If anyone knows of a good place to find the figures for this I\’d be grateful. Would be interesting to see what the effect on total tax collections would be if we did move back to 1983 tax rates as a percentage of the male manual wage.

9 comments on “Double the tax on spirits!

  1. I suspect that as well as a Laffer Curve for excise duties there is also a Booze Cruise curve. In recent years the cut price deals in the supermarkets have reduced the motivation to go on such a trip. Double the excise duty and the motivation might return.

  2. Another step in opt-out Britain: I will opt out of buying booze in Britain. Even if it costs me more money: the pleasure in depriving Brown of revenue is quite tangible. Indeed, much of my tax planning is about reducing tax to the state rather than my net position.

  3. Sounds to me like someone is flying a kite here. 8 quid on a bottle of spirits, they murmur – and then, when it’s only a fiver, we’re supposed to breathe a sigh of relief.

    God, but I loathe these people.

  4. You forgot the most astounding reason they gave. To appease the health lobby.

    Not to please their voters, you notice, but to satisfy state-funded quangoes and fake charities.

    Wherefore art thou, democracy?

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