The single use vape market appears to be worth some £750 million a year. At a fiver a piece that’s 150 million units. Oh, and when we run the numbers back the other way each vape contains half a penny’s worth of lithium. At today’s very high valuation that is.
Ten tonnes of lithium – despite the fact that this is becoming one of those little factoids that is doing the rounds – is trivia.
It’s also true that there is that Pigou Tax idea to think about. That there are externalities, not properly contained in market prices and a tax should be used to correct that. But that idea does insist that the tax should – must – be equal to the size of the problem. It’s not in fact true that this is an externality, that ha’penny of lithium is already included in the market price. But imagine it isn’t, the tax should be that half penny. £4 is overdoing it by only 800 times.
People are losing their minds here. This is like trying to judge the overall health of British sport by concentrating on the question of Sheffield Wednesday’s B Team left fullback. Something of interest to perhaps five people – the manager, the two potential fullbacks and their Mums.
that Pigou Tax idea to think about. That there are externalities, not properly contained in market prices and a tax should be used to correct that. But that idea does insist that the tax should – must – be equal to the size of the problem.
Nice bit of economic theory you’ve got there. But how often does that in fact happen? (Sound of wind blowing across an empty desert)
ASH ( a lobbying charity in receipt of government money) want a tax on vapes to reduce vaping. They’re using ½p worth of lithium as an excuse. So what’s the betting there’s now someone in government looking at that potential tax take & licking their lips? And the amount will be ½p? ASH want £4
In the end it’ll be nothing – no tax (LOC???) – or some other figure. What it won’t be is a Pigou tax.
Nice theory. But do us a favour. Keep it as a theory economists can chat about in sealed rooms well swept for bugs, eh?
Arthur Cecil Pigou d: 7 March 1959 Does anyone want to dig him up, make sure of that? Teacher and builder of the School of Economics at the University of Cambridge. He would be, wouldn’t he?
Unutterably stupid cvnt. As is anyone promotes his idea.
The vague idea that if you tax something you get less of it seems pretty sound.
The specific amount of tax and how much less you want, that’s more difficult but Pigou is the soundest imv.
There does seem to be a new school of thought, no name for it yet, which states that you don’t tax but instead pay people not to be bad – examples being we’ll pay you to scrap your car, or to return your plastic bottles or to not use electricity at peak times or to not farm your own land. I don’t like this new school.
Is part of the problem applying this to small or inconsequential items means you can’t charge enough to make people change, plastic bags in the supermarket locally have gone from 5c to 10c as people didn’t care about the extra on their weekly shopping. The main driver for change really seems that they are making them flimsy people aren’t bothering
The vague idea that if you tax something you get less of it seems pretty sound.
Indeed. It’s idea that you can set the rate of tax at the cost of the externality is where it founders. Ignoring the difficulty of pricing externalities, it’s the collision with the politicians who will be setting the tax. Their incentive will always be to maximise tax revenue. So it’ll always set to do that. Show me one that isn’t?
What sets tax rates in the first place? What the electorate will tolerate. The danger with these sorts of taxes is they can crank up the tolerance level of the electorate because they give the illusion of being justifiable.