Aggressively regressive – the ‘sin taxes’ that make the poor poorer
Christopher Snowdon, IEA, October 2013
Despite significantly lower rates of alcohol consumption and car ownership, the poorest income group in the UK spends twice as much on sin taxes and VAT than the wealthiest income group as a proportion of their income. Tax is the single biggest source of expenditure for those who live in poverty and indirect taxes are a major cause of Britain’s cost of living crisis. Halving ‘sin taxes’, scrapping green energy subsidies and returning the rate of VAT to 15 per cent would reduce tax evasion, reduce black market activity, improve labour market flexibility and stimulate the economy. Above all, it would put money back in the pockets of those who are in greatest need of it.