166
Earned income taxed twice as heavily as capital gains for some in UK, study finds
(www.theguardian.com)
this post was submitted on 20 Aug 2023
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UK Politics
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The problem with sin tax is that they just demonize a new behavior or product whenever they want to raise taxes. It becomes a financial burden to be yourself, depending on the whims of society.
No. Pigouvian taxes are about putting a price on the social cost of antisocial activities - pollution, congestion, etc.
If I close and seal all my doors and windows and then choose to pump CO2 and other harmful gases into my house, the cost of doing this is largely going to fall on me, and I can probably be trusted to be sensible about how much of this I do. But in the real world, there is no natural mechanism to force me to internalise the costs to the rest of you of pumping out carbon emissions into the atmosphere.
It's nothing to do with 'sin'. Pigouvian taxes are about putting the societal price on antisocial behaviour so market forces can function.
The problem is that they change the topics to tax more behaviors. It starts out as a carbon tax on big trucks, then they add a tobacco tax, then a vape tax, then an alcohol tax, then a bar tax, then a restaurant tax, then a soda tax, then a streaming video tax... Whenever they want more money they demonize a new behavior.