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.


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EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).


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