Taxes are a four letter word



There is no middle ground in the US. Or at least it seems like that from an European perspective. In Europe, we have a lot of middle ground. We call it: taxes. Because, even if the government does want to behave people in a certain way, they tend to leave your choices open, but they will try to make your decision easier by adding taxes on undesired products.

Tobacco is not only not healthy but also a cash cow for the government. The country of our Finnish fellow Olavi  taxes for instance the life out of liquor.

In the US tax or taxes seem to be a four letter word, despite the actual spelling. In every other place you see the price of the product, but if it is your turn to pay, many a foreigner will be surprised, over and over again, because the price on the menu is without tax. Thus every check, every bill is a reminder that the product/service would in a hypothetical world be cheaper, but the restaurant is forced to add a Value-Added-Tax to your bill thus depriving you of more money than they, likeable people as they are, wanted to. Or, as I read it, every bill has a design of a certain Emil-Zola-like "J'accuse". I accuse the government of making life difficult for adding taxes to any given product . Leave alone the fact, that with the taxes a government would normally provide a working infrastructure and education (I will not go so far as mentioning health care).

All that said, in the US, land of the free, where it is your God- and constitution-given right to bear arms, they vote subjects into power who cannot resist making life better and healthier for you - by means of depriving you of a choice. The era of prohibition is just one example. New York mayor Michael Bloomberg, prohibiting recently the sale of large sugary drinks, is another example. Why don't you just let them choose for themselves and - if in doubt - tax (the {insert any given four letter word}) the non-desireable items to finance a better infrastructure, waste disposal, cheaper public transport?


The big coke debate - why upsize my tax bill?

 I congratulate Mike Bloomberg for having the balls to ban the big Coke. The "taxes are a four letter word" blog argues that he should have taxed the **** out of the coke and somehow made it less appealing to consumers.

I disagree with that approach and here's why.

A tax should be about collecting revenue. How much revenue is likely to be collected from taxing a big coke and who will pay it? I would guess that it wouldn't be a great revenue winner in over all terms for the city of New York (if they have the power and capacity to levy and collect a tax).  

And I imagine the people who pay it would be mostly lower income individuals who, sadly, tend to be more attached to junk food and less in tune with health messages. So its a nuisance tax that hits the poorest people.

Taxes on vices such as alcohol,  cigarettes and gambling are big revenue winners for the state. Yes governments sometimes say that the tax helps make the product less appealing to consumers because it makes it less affordable, but really they tax it because it's a great stream of income.

So Bloomberg bans the big coke, presumably because he's been shown some health evidence that suggest it contains three, five, twenty five, times more sugar than anyone should healthily consume in one serving. He probably figures that by slowing down the rate of consumption we might have less obese people, with less heart disease and diabetes placing a social and financial burden on the state and its health system.

I'm in favour of a direct approach through regulation and not imposing half-assed taxes that probably won't achieve their desired goal.