Iain Duncan Smith's idea of a binge-drinking tax - increases of around 7p on the price of a pint of beer, 20p on a bottle of wine and 70p on a bottle of whisky - seems to me fundamentally misconceived.
One of the reasons that government taxes alcoholic drink is that people do not drink less as the price goes up. It's what we used to call marginal inelasticity of demand when I was a lad.
The likely outcome of the tax would be that people who spend too much on drink now would spend even more on it in future, thus exacerbating the social problems the Tories are worried about.
A better idea would be to give local councils back some of the planning powers they used to have over the opening of new licensed premises and to clamp down on happy hours, two-drinks-for-the-price-of-one offers and the like.
No comments:
Post a Comment