The spectre of sin taxes

With the Dublin government about to unleash a wildly unpopular budget on the population, it’s worth asking why we let governments get away with interfering six taxes – and just how drinking water and driving cars became sins.We all know that next week’s budget is going to be painful. We know this because the government keep telling us so.

Among the various measures the government will implement in the hope of plugging the gaping hole in the public finances will be the usual round of increases in consumption taxes. Tobacco and alcohol will undoubtedly see rises in duty. Smoking cigarettes, of course, has long been considered only a step above spousal abuse in moral terms but today’s political obsession with ‘binge drinking’ means drink will get a look in too. The fact that the government thinks it can rake-in €140m in revenue is purely coincidental, you understand.

Taxing people as a method of punishing their behavior is about to get a lot bigger thanks to the introduction of a ‘carbon levy‘ and, though unrelated to the budget, it’s a sure bet that Dublin City Council has its beady little bureaucratic eyes on a London-inspired congestion charge, also to be sold to the electorate on green grounds.

For the record, when the Greens first mooted carbon taxes they claimed they would be ‘revenue neutral’. Whoops sorry Father! What we meant by ‘revenue neutral’ was that it would coin about €4-500m a year.

For the more socialist-inclined among Slugger’s readership, it’s worth pointing out that consumption taxes are regressive and disproportionately hurt the poor. Green supporters claim that the recently introduced motor tax regime “rewards drivers who buy greener, less-polluting cars”. What it actually does is punish people don’t. It’s true that this means pricey SUVs are more expensive to drive, but it also means a typical family car is too. Hybrids, which are tax exempt, are not a common site outside the leafy suburbs of south Dublin. Making cars more expensive literally hampers working class mobility. It’s a sad fact that when we used to talk about barriers to mobility we were talking about social mobility but today we literally mean moving about.

Vat is already out of control in the Republic and is a major contributing factor in revenue lost to the North (along with good, old-fashioned price gouging) but the behaviour taxes are a particularly insidious form of social control that amount to an attack on the working class. The wealthy can afford to keep their cars on the road, drink bottled water and smoke as much as they please. Greens, who despite all the evidence to the contrary, pose as a friend of the poor will respond that the taxes target the wealthy, buzzing around in their BMWs. This is arrant nonsense.

Remember, the Republic of Ireland already hammers poorer people with its bin charges and despite the fact that Ireland is one of the wettest countries in Europe, we’re soon going to be hit with water charges too. Despite the ridiculous propaganda pumped out by the likes of Dublin City Council, there is no water shortage in Ireland. At all. What there is, is an il-maintained and ageing infrastructure in dire need of capital investment. The Green Party, a minority partner in government, opposes measures including piping water from the Shannon to Dublin, preferring instead to charge people for the stuff. Local government, meanwhile, is clamouring for any income it can get its grubby mits on, having been chronically underfunded since residential rates were done away with in a populist move. Paying for water and bin collection amounts to double taxation – after all, when the government got rid of rates it paid for local services through direct taxation. Central government failing to properly fund local authorities is no reason to start gouging the public.

No-one is saying that the budget should include massive tax rebates and a box of chocolates for everyone in the audience. It’s just that the government’s plan to push the poor around is being widely ignored.

Being ripped-off by private enterprise is already said to be our patriotic duty. Now we can add being shafted by the government to the list of things done for our country.


Jason Walsh is a journalist an the editor of forth


  • slug

    What does Jason Walsh propose to fill one of the biggest budget deficits in Europe? Spending cuts? A property tax? Company tax? Income tax?

    I agree though that the ROI has by far the most regressive tax system in Europe.

  • Jason Walsh

    Nothing in particular. I did say no-one expects the budget to be fun. I would just like people to notice quite how regressive things are, that’s all.

  • Ulster McNulty

    Tigers, they bite.

  • Ulster McNulty

    the Celtic Wildebeest

  • The Raven

    “it’s a sure bet that Dublin City Council has its beady little bureaucratic eyes on a London-inspired congestion charge, also to be sold to the electorate on green grounds.”

    Good. Not a moment too soon either. Regardless of who it hits. And with a bit of luck, Belfast will follow suit soon.

    “What there is, is an il-maintained and ageing infrastructure in dire need of capital investment.”

    That sounds familiar to Nordie ears…

  • Dave

    “… it’s worth pointing out that consumption taxes are regressive and disproportionately hurt the poor.”

    And perhaps the ever-expanding definition of sectarianism could be expanded further to include rich/poor social divisions. In which case, it would be the poor’s ‘tax the rich’ statements that are overtly sectarian.

    I agree that consumption taxes hurt the poor more than the rich since that it is self-evident. I would go further and say that they are actually designed by the state to target the poor while masquerading as an indiscriminate universal tax. But those indirect taxes are a consequence of taking the poor out of the income tax net.

    The state must not be allowed to engineer a two-tier society where a group of citizens contribute to society and another non-contributing group live off those contributions. That is what Obama is engineering in the US where he seek to take a majority of voters out of the tax net, transferring the tax duties onto a minority of voters, and thereby engineering a majority of voters who will always vote for that regime out of self-interest. If indirect taxes are to be reduced to assist the poorer social groups, then they must be replaced with direct taxes.

    Incidentally, carbon taxes and water charges have nothing to do with national government. They are mandated by EU government with the national government only having discretion as to the form of they take. In the example of the EU’s Water Framework Directive, many EU countries experience water shortage, so one-size-fits-all Directives mandate that all EU countries share the same solution irrespective of whether or not they share the same problem. So there is no point in having a debate about ‘sin taxes’ since the nation has no democratic remit to alter policy in this area. These policies are now post-democratic.

  • Batista

    “it’s a sure bet that Dublin City Council has its beady little bureaucratic eyes on a London-inspired congestion charge, also to be sold to the electorate on green grounds.”

    Good. Not a moment too soon either. Regardless of who it hits. And with a bit of luck, Belfast will follow suit soon.

    Belfast is one of the easiest cities to drive in

  • The Raven

    “Belfast is one of the easiest cities to drive in”

    And…? That’s not my point.

    Dave says “If indirect taxes are to be reduced to assist the poorer social groups, then they must be replaced with direct taxes.”

    In fact, isn’t time the entire taxation system had a complete re-work…? Especially with an eye to reducing administration, reducing the *number* of taxes, and being a little more up front about the funding needed to keep services running? I personally have my eye on district rates, tv licencing, road tax and some of the criteria by which VAT is levied.

    Now…just to find a party to run for….

  • Jason Walsh

    “Belfast is one of the easiest cities to drive in”

    And…? That’s not my point.

    No, your point is environmental, but what the question of mobility? Why should easy travel be the preserve of the rich? Many people in Ireland, North and South, had grandparents born in the twentieth century who were actual peasants. We’ve come a long way since then.

  • Jason Walsh

    And perhaps the ever-expanding definition of sectarianism could be expanded further to include rich/poor social divisions. In which case, it would be the poor’s ‘tax the rich’ statements that are overtly sectarian.

    Sadly I’ve heard that argued seriously. The point is that (back when they meant anything) were not rooted in envy but in mass liberation. Today… arguably a different story.

  • OC

    For me, “sin taxes” are immoral unless directly used to ameliorate problems caused by the “sin” being taxed.

    For instance, a liquor tax to fund alcohol abuse treatment, or catch drunken drivers is good; to fund new furniture in legislators’ offices is immoral.

  • wild turkey

    In these sentiments, Sir, I agree to this Constitution, with all its faults, — if they are such; because I think a general Government necessary for us, and there is no form of government but what may be a blessing to the people, if well administered; and I believe, farther, that this is likely to be well administered for a course of years, and can only end in despotism, as other forms have done before it, when the people shall become so corrupted as to need despotic government, being incapable of any other.
    Benjamin Franklin: Speech to the Constitutional Convention (1787-06-28)

    In the fist instance, government is nothing more than those decisions on how to raise revenue and spend it.

    Our politicians would have us believe that the PEOPLE THEMSELVES are the ultimate origin of all governments. Clearly this is not the case.

    It is the COLLECTIVE CHARACTER of a country that determines its rulers and its culture. Hence, Franklin identifies despotism as the natural consequence of “when the PEOPLE shall become so corrupted as to NEED despotic government, being incapable of any other.”

    It is as old as the hills, and as fresh as the morning dew: people ask who will civilize civilization, if not the people who would pretend to civility?

    Face it. In Ireland, as in the USA, the citizens have lost, and probably never possessed, the spirit that would create a free republic

    And therefore, now our present spirit merely defines us as a people that cravenly desires and accepts a government that defines, mirrors and satisfies only ITS need and values and not that of the people.

    This is called despotism.

  • The Raven

    “No, your point is environmental, but what the question of mobility? Why should easy travel be the preserve of the rich? Many people in Ireland, North and South, had grandparents born in the twentieth century who were actual peasants. We’ve come a long way since then.”

    Actually my point is the reclamation of town and city centres. My point is also about the provision of regular, timely, and efficient public transport in those places of greatest population, where it **should be** easiest to provide.

    As for the grandparent thing – a quick look at the photography of Chris Killip will show that we’ve come a long way since 1972, never mind 1940/50.

  • slug

    Just to clarify that none of my grandparents were peasants. In fact I don’t think that applies to people I know either.

  • Jason Walsh

    Just to clarify that none of my grandparents were peasants. In fact I don’t think that applies to people I know either.

    Fine. It wasn’t an insult, just an indication of economic growth between the Ireland of the 1900s and today. Plenty of people around Belfast in particular were from the industrial working class (less so west of the Bann and in the South due to the lack of industrial development) and some are no doubt descended from the wealthy. The point stand, though.

  • slug

    Northern Ireland was a great place economically in the 1900s, the industry, the great buildings, the growth.

  • Jason Walsh

    slug

    Counties Antrim, North Down and North Armagh, sure. Elsewhere, particularly west of the Bann, economic and industrial development was as lacking as elsewhere in Ireland. What’s your point? My statement isn’t about slagging-off ‘perfidious Albion’ for failing to develop the place – after all, post-independence the Southern elite managed to screw that up just as handily – but simply that with economic development comes (some, limited) liberation.

  • slug

    Jason

    I am not developing a thesis. I was just reacting to some things you were saying that seemed wrong to me.

  • wild turkey

    ‘Northern Ireland was a great place economically in the 1900s, the industry, the great buildings, the growth. ‘

    Slug

    words like ‘ calendar’.’wall’,’clock’…..
    it is now 2009.

    ‘ those jobs are goin boys and they ain’t comin back… to yer hometown, my hometown’

    Now

    (by the way, the only 3 letter word in the english language that the very polite in norn ironland can somehow draw 4 syllables from. don’t believe me. do jane morrice on youtube)

  • Dave

    wild turkey, the point that Benjamin Franklin was making is that it takes great men to build a great democracy but that, paradoxically, a great democracy can only be maintained by weak men. People will admire their great constitution at first, taking great care to study it and live by its values. Then, as the generations go by, they’ll take it for granted, not study it, and thereby find themselves unable to live by it – and then they’ll forget all about it. Then, of course, they have no democratic values to live by, devaluing their political system accordingly. Then it can be disposed of without protest – and their freedoms along with it. The Americans don’t even see that Obama intends to give their sovereignty away in Copenhagen because sovereignty is one of those obscure constitutional concepts that they no longer understand and take for granted.

    And you’re spot-on in the conclusion you draw from that for Ireland too. Fundamental constitutional concepts that guarantee our fundamental national freedoms have been systematically invalidated, and the Irish nation has colluded in its own inevitable destruction. In our example, that neglect happened over a few generations and is hastened by europhiles who wish to integrate this state into the EU and by West-Brits and Provos who never recognised its legitimacy anyway. It is also, of course, hastened by those who hasten the demise of US sovereignty, i.e. those who promote a global government. And lastly, it is hastened by statists who see democracy by ignorant people and who wish elites to determine social order. as rule who is there to stem the tide but an uneducated population that has no grasp of the concepts that underpin their freedom?

    The people will let their freedoms all slip away, and then it will be down to a new generation of revolutionaries to assert the lost rights to self-determination and national sovereignty all over again. That, unfortuantely, will be a very bloody and prolonged process – far harder than when the enemy of our freedoms was an external power.

  • NCM

    Ok, fine, let folks smoke tobacco all they want without trying to dissuade them through taxation. Oh wait, that’s fatal. And their miserable deaths are costly.

    For goodness sake man, pick another battle.

  • aquifer

    You can’t always get what you want

    But if you try sometimes, you might just get what you need.

    Awful to have an English rock band heavily indebted to Black American music write economic policy, but only best advice will do now.

    Wants can be infinitely large, and satisfying some of them have negative effects on health, so we should curb them to what we can afford and to what our bodies can bear without deteriorating. More working class people have their health damaged by cigarettes and drink than middle class people.

    For human beings, expenditure on discretionary wants such as drink and tobacco and recreational travel compete directly with spending on necessities such as basic foodstuffs and fuel, so. If incomes are limited, and if we are to assure equality of opportunity for dependent children in particular, it is better that the optional stuff costs more than the stuff that can keep us fit to function socially & economically and fit to learn and grow.

    Ireland has one of the richest populations on earth, with good social security provision that can cover the cost of taxes on basic amounts of necessities. If we are quick and smart about it, we can keep resources flowing to productive parts of the economy that can grow and pay our debts off, maintaining incentives that retain and attract export businesses.

    Ireland cannot afford that everyone enjoys ‘status denoting’ goods equally however. We have to be able to reward people who provide an unusually large contribution to economic or cultural life with above average status.

    It is part of being free that such status does not have to be awarded by state functionaries, and that people can pay money to award themselves special status, such as being able to take time away from work to chase a small white ball around a field. I don’t know why they would do that and not spend a saturday afternoon drinking beer and listening to rock and roll. Each to his/ her own.

    If the equality agenda means that people in rich countries should all overconsume equally to be respected, regardless of the consequences for the global poor, I want no part of it.

  • wild turkey

    ‘The people will let their freedoms all slip away, and then it will be down to a new generation of revolutionaries to assert the lost rights to self-determination and national sovereignty all over again. That, unfortuantely, will be a very bloody and prolonged process – far harder than when the enemy of our freedoms was an external power. ‘

    Dave, the process need not be be a bloody one, but it will be prolonged. the process i am thinking of is a process whereby individuals take account of their freedoms, responsibilities and behaviours… and then based on that self reflection act accordingly,

    what i am trying to articulate is that no longer is the ‘enemy’ external. rather we must acknowledge the need for personal accountability, responsibility and, ultimately, reckoning… and then in all the facets of our lives, including the political by ultimately expressing political preferences thru votes (or guillitines?) , act accordingly.

    this may or may not make sense but… a few weeks ago I took my kids, aged 9 and 10, to the re-opened Ulster Museum (worth a visit folks!!). there was a big banner over one of the entrance ways. it said

    ‘ we have not inherited the earth from our ancestors, we borrow from our children’

  • iluvni

    Are we still getting the €millions handout the Republic’s Goverment promised us?

  • “despite the fact that Ireland is one of the wettest countries in Europe, we’re soon going to be hit with water charges too.”

    The govt. doesn’t charge for putting out barrels to catch rain. It charges for a treated supply, and if applicable for connection to public sewerage. This is a profoundly stupid statement from someone who claims to be a journalist.

  • Fr McGee

    Mark

    Good point. However, in Catholic Bolivia, Bechtel, good friends of the war on terror, were charging the indigenous Catholics for rain water.

    In the UK, they want to charge churches for the size of their roofs, arguing that they hijack more rainwater and need more drainage than others.

    Britain and John Bull’s other island have a long history of regressive taxes to fund their wars of extermination and their royalty (pretend royalty in Ireland’s case).

    Smoking is an invidious addiction of dirty, selfish, weak willed people. It has to be taxed as governments need the money in the short term to pay the immigrant nurses who look after them.

    If you do have some money, consider the returns of the Satan Fund and the Vice Fund. These funds always perform better than so called ethical funds.

  • Mack

    Mark Dowling

    It’s not as stupid as it may appear. The infrastructure to treat water is a mostly fixed cost, the marginal cost of treating another litre of abundant rain water is relatively low.

    I made this point to someone who works in the water industry, who supports the tax, they feel the tax is justified because of extremely heavy usage by some businesses.