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Booze Taxes Have to be Reduced Or The Bootleggers Get The Money | Anorak

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Booze Taxes Have to be Reduced Or The Bootleggers Get The Money

DO booze taxes have to be reduced? Well, of course they do; hardened topers like myself insist they must be.

However, there is a more serious point here as well. The reason we tax booze so heavily isn’t, as some might think, to make everyone healthy by keeping them off the sauce. It’s actually because demand has a very low elasticity.

That’s the economists’ posh way of saying that when you put the price up people still buy it. Because, you know, living in modern Britain will drive anyone and everyone to drink. So it’s absolutely the opposite that is true: we don’t tax booze a lot to stop people drinking it but because even when we do tax it people still drink. That means we can get tonnes of money out of taxing booze: and getting tonnes of money is the point of taxing things at all.

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Posted: 30th, November 2011 | In: Money | Comment