Thursday, December 3, 2020
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Reader’s comment: Thank you, nanny state

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In response to Jake Scott: Sugar Tax hits the poor with a double whammy, geo wrote:

Every time a punitive tax is whacked on to something that is ‘bad’ for us by the nanny state, I am reminded of the principle of Price Elasticity of Demand.

The concept where a rise in price DOES NOT affect sales over a range of prices due to the great desire to have something. In scarce resource terms, people will forgo other things to afford the items they really want even in the face of price rises.

So when the govt adds yet ANOTHER tax (be it a sugar tax or the minimum alcohol price) to make things less attractive to the consumer, people give up other things – vegetables, children’s clothes, heating – to get what they really want (alcohol or sugar-based drinks).

Given it’s those at the lower end of the socio-economic scale who earn the least – congrats, you just created a regressive tax on those who can least afford it while you feel so very very smug about how caring and proactive you are.

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