The Budget analysed

[caddyman]

The big news story of the day is of course the Budget (in the UK at least). As with most people, my interest is rather limited because most of the budget provisions work at an entirely different level to my finances.

There is some interest to be had, though. One of my colleagues is trying to work out if his old banger is worth less than £2,000 since there is a new provision on the table to reduce the purchase price of newer, greener cars by that amount if you trade in your rattling old smog-monster. I expect there will be some outcry over the tax rate of 50% for those who earn over £150,000 a year. I have some way to go before approaching the orbit of that august figure, so I remain sanguine about it and point the complainers to the 95% rate faced by high earners in the 1960s. (Remember Taxman by the Beatles?).

The bit that has had me wondering though is the annual hike in alcohol and tobacco taxes. Not the fact that they’ve been pushed up by 2% equating to 7p on a pack of 20 fags and a penny on a pint of beer: that’s pretty much to be expected as a matter of course and it’s nearly 2 years since I stopped smoking anyway, so SM-U-G. No, the bit that interested me is the arcane and mighty economic theory underlying the timing of those tax increases. Cigarette tax goes up at 6pm tonight, but alcohol tax only goes up at midnight.

Presumably someone at great cost to the Exchequer has calculated the optimum distance from the average off licence or supermarket to the pub. Smokers will be descending on the two former to stock up on pre-budget smokes as soon as possible after leaving the dole office work, so it is necessary to plug them for the extra cash as soon as possible. Publicans meanwhile can carry on as normal until closing time, because the withered lungs of heavy drinking smokers will not allow them to stagger there in time to buy any beer until tomorrow, laden down as they are with tons of cigarettes and empty wallets.

I can’t see how this stimulates the economy, though.

Comments

[fen-wolfchile.livejournal.com]

Must be said I'm sorely tempted to go buy a cartoon of fags and then invade a pub :)

[budgie-uk.livejournal.com]

It's worth remembering that the excise duty increases on fags and booze only apply when they leave the bonded warehouses. Anything that's already in the shops or on the way to them as of 6pm/midnight (as appropriate) should remain at the old price.

And since supermarkets have large stocks, it normally takes a week or more before the new stock starts filtering its way through to the public.

[delvy.livejournal.com]

I woud have preferred something more radical - like raising personal allowances to 10k there by putting more money back into the pockets of those most likely to spend it.

[ellefurtle.livejournal.com]

So WINE SPREEEEE!

[jfs.livejournal.com]

Must admit, I'm finding it hard to shed a tear of sympathy for anyone hit by the new highest tax bracket. Especially because it's a progressive tax anyway.

The comments in the Times are full of the "OMG! All the high earners are going to leave the country like they did pre 1979!"

Wasn't the highest rate of tax 60% until 1988 or so?

[fractalgeek.livejournal.com]

The highest rate stuff is a token gesture anyway...., it's not going to raise significant dosh.

Fags, Booze and fuel. That's where the money is. Back to Booze cruises, anyone?

[ruletwo.livejournal.com]

I saved myself 4p by going to the pub after work - hic!