Did Dan Hannan Really Write This?

January 19th, 2010 by The Parallax Brief

One of Dan Hannan’s readers wrote to him with a silly, uninformed story to “illustrate” why tax cuts will “always” favour the rich.

Amazingly, Mr. Hannan seems to agree with its implication.

Suppose that every day, ten men went to the pub, and drank exactly £100 worth of ale among them. If they paid their bill the way we pay our taxes, the breakdown would be roughly as follows:

The first four men (the poorest) would pay nothing. The fifth would pay £1. The sixth would pay £3. The seventh would pay £7. The eighth would pay £12. The ninth would pay £18. The tenth man (the richest) would pay £59. So, that’s what they decided to do.

The ten men drank contentedly together in the saloon bar until the landlord, meaning to be helpful, presented them with a dilemma.

(more…)

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Taxes Should Be Used to Call Time on Binge Drinking

January 3rd, 2010 by The Parallax Brief

Awaking deep into the afternoon of New Year’s Day with the kind of juddering hangover from which one can only recover by lying on the sofa, covered by a blanket, eating copious amounts of comfort food and occasionally moaning pathetically, the Parallax Brief turned on his laptop and was greeted with the news that alcohol-related health problems and injuries cost the NHS over GBP2.7 bln in 2006/7.

That rang true with the Parallax Brief as the kind of sum it would take to rescue him from the effects of his New Year’s Eve largesse.

The Daily Mail, predictably, blamed the government for the rise in binge drinking, arguing that its 24 hour licensing “free-for-all” had had a “disastrous impact on the NHS.” The Independent, also seemingly doing its best to play up to its stereotype, advocated “More counselling… reinforced by broader cultural change”. Interestingly, the Spectator, which, completely coincidentally, sends the Parallax Brief an emailed newsletter which is regularly supplemented by adverts for wine clubs, wine reviews, and special offers on wine, informed us all that “the war against alcohol” costs “hundreds of millions of pounds and endangers the social lives of countless innocent young men and women,” in an article titled “Don’t Worry — Drink and Be Merry”.

Well, it may well be true that Ecclesiastes 8:15 told us that the Lord ”commended mirth, because a man has no better thing under the sun, than to eat, and to drink, and to be merry,” but when the bill to the NHS alone for that mirth runs to nearly a tenth of our entire defence budget — to mention nothing of the costs of policing, street cleaning and repairs, as well as lost business productivity resulting from alcohol-related illness — the Lord would have surely agreed that it was time to do something about it.

This seems to be the consensus between government and the opinion editorial columns of recent days, with the Guardian reporting that, “the Commons health committee is expected to report, after lengthy inquiry, that the current regime is too lax, with licensing laws poorly enforced and the off-licence trade under-regulated. A key recommendation will be minimum pricing per unit of alcohol, essentially targeting big supermarket chains, widely accused of using cheap booze as “loss leaders”".

However, the Parallax Brief believes that there is another way of looking at this problem. It is clear to most people who spend a significant amount of time outside Gordon Brown’s Number 10 bunker that Britain desperately needs to rebalance its budget. The Right wants swingeing cuts in public spending; the Left wants taxes raised on the wealthy. But, in the end, it is likely that the budget deficit will be cut with a combination of both tax increases and spending cuts. Within this context, it’s worth asking, which taxes would it be fairest to increase, and how can we best save money on public services?

The Parallax Brief can think of no better place to start than binge drinking. Increasing taxes on alcohol, and increasing them by a lot, would in one swoop raise money, transfer a greater portion of the cost of irresponsible drinking to the irresponsible drinkers, and cut public expenditure by reducing alcohol consumption. Such a tax would not be further encroachment of the nanny state, because one could still chose to drink. And surely taxing socially undesirable behaviour is fairer than taxing the fruits of labour through income tax hikes or corporation tax increases, or than cutting public services for the poor?

On a trip to Helsinki last year, the Parallax Brief almost had a drink related heart problem of his own when the bill for the two half litre glasses of German wheat beer he drank in a small city-centre bar came to 15 euros. Recovering from the shock, he decided that the last thing he would want to see is the UK following suit, forcing pubs to charge five or six pounds for a pint of beer.

Now he’s not so sure.

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The Shining Lights of Libertarianism

October 26th, 2009 by The Parallax Brief

Libertarians sure know how to pick ‘em. First there was the 2006 Ludwig Von Misus institute report on Somalia, “Stateless in Somalia and Loving it”, which detailed just how Adam Smith’s invisible hand is working it’s magic in prosperous and pleasant East African nation. Of course, the US State Department had a different view of what happens when the influence of government is removed (via Mike Tomasky’s Guardian Blog):

The country’s poor human rights situation deteriorated further during the year, exacerbated by the absence of effective governance institutions and rule of law, the widespread availability of small arms and light weapons, and ongoing conflicts… Human rights abuses included unlawful and politically motivated killings; kidnapping, torture, rape, and beatings; official impunity; harsh and life-threatening prison conditions; and arbitrary arrest and detention.

In part due to the absence of functioning institutions, the perpetrators of human rights abuses were rarely punished. Denial of fair trial and limited privacy rights were problems, and there were restrictions on freedoms of speech, press, assembly, association, religion, and movement.

The Parallax Brief knows all three of his readers would jump at the chance to escape the dead hand of government in socialist hell-hole Britain for the sunnier climes of Somalia, where they would be free to be beaten, kidnapped, raped, tortured or killed without the nefarious agents of state bureaucracy interfering.

Or is it that Libertarians believe that Somalians clearly don’t value liberty and justice, because they haven’t set a price for the private sector to provide those goods?

Whatever the reasons, the bat-shit crazy libertarian examples of the ’successes’ of libertarian policy continued today with the Adam Smith Institute blog offering a glowing recommendation of Georgia as just the place that “libertarians could move to” if “Britain is indeed going to the dogs”.

“Their flat-rate income tax – initially set at 25% – was cut to 20% in response to the economic downturn, and is set to be further reduced to 15% by 2013. The tax on interest and dividends will be phased out by 2012. VAT is 18%. Corporation tax is 15%,” gushes blog editor Tom Clougherty. “What’s more, it looks as though the government will soon pass into law one of the best pieces of legislation I’ve ever seen: The Liberty Act. This act, which is going to be incorporated into the Georgian Constitution, caps government expenditure at 30% of GDP, budget deficits at 3% of GDP, and public debt at 60% of GDP.”

Ah, yes, the Georgian government. At first the Parallax Brief thought that the Somalian example was an aberration.  But it seems that many high profile libertarians and libertarian organizations place far greater import on economic liberty than personal. Somalia was great because of its free telecom markets — and damn the fact it severely curtailed what should be core values for any self-respecting libertarian: freedom of speech speech, press, assembly, association, religion, and movement.

Yet here is the phenomenon again. To be sure, Georgia has low-ish, flat taxes, a sparse social safetly net and has passed all kinds of laws to restrict regulation of the markets — all of which which probably makes the economic side of the country sound great to a libertarian. But the idea that Mikheil Saakashvili’s government is remotely democratic or in favour of genuine liberty is preposterous. (Although the Parallax Brief does understand that this is a myth perpetrated in the western media.)

In September 2007, Georgians, for some bizarre reason the Parallax Brief can’t quite put his finger on, began protesting at the libertarian policies of Saakashvilli’s government, which had caused mass unemployment, severe privations among even those who were employed, and, among other policies, removed utility subsidies for all. Instead of permitting the protests as the inalienable right of his citizens, the president ruthlessly crushed them with riot police using rubbler bullets while shutting down pro-opposition television stations. The subsequent elections were savaged by the OECD, whose monitors reported ballot box stuffing, vote counting and tabulation which did not match procedures, turnout in certain areas considerably higher than the national average, as well as courts which responded to complaints by stretching “the law beyond reasonable interpretation and without regard to its spirit in favour of the ruling party candidate”. Further, courts “did not fully and adequately consider and investigate a considerable number of complaints regarding irregularities, some of which were of a serious nature. A large number of complaints were also ruled inadmissible or dismissed on technical grounds.”

Yes, Georgia: home of the free.

To be fair to Mr Clougherty, he did mention that a small problem might be the looming presence of Russia. But he needent worry! He’ll be happy to know that things will only get better when Putin sends the T90s into Tbilisi:  Russia has flat taxes, too — and set at an even more libertarian 13%.

Happy days!