William Watson: Beer is a good place to start the tax revolt

We don’t want governments that are inflation\u002Dnormalizers. Read on.

But the economist in me wants to quibble. The tax on beer isn’t actually going up as a result of an annual increase tied to the consumer price index. It’s going up in nominal terms. But in real terms — relative to all other prices — it’s staying the same. If the tax: when you’ve got it, up-and-down all becomes relative.

Our not knowing makes things way easier for government. Is Parliament avoiding its democratic responsibility by letting the CPI do the heavy lifting on raising the beer tax? Not really, since the tax isn’t really being raised. But it does mean the government doesn’t have to seek legislative permission to raise a nominal tax even if only just to keep it constant in real terms.

The truly damaging effect of indexation, in government and elsewhere, is that it normalizes inflation. We don’t want governments that are inflation-normalizers. We want inflation to be just as much an irritant to them as it is to the rest of us.

Governments generally do impose the discipline of indexed income tax brackets on themselves. Usually they’ve been shamed into it. In tough fiscal times they sometimes resort to only partial indexation, i.e., indexing only above three per cent inflation or so.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

financialpost /  🏆 7. in CA

South Africa Latest News, South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

William Watson: At least Pierre Poilievre thinks about monetary policyHis plan for the Bank of Canada to control asset price inflation is a worthy idea, but not so easy to do with interest rates. Read on.
Read more »

William Watson: At least Pierre Poilievre thinks about monetary policyHis plan for the Bank of Canada to control asset price inflation is a worthy idea, but not so easy to do with interest rates. Read on.
Read more »

Today's letters: Thanks to Jim Watson, Ottawa's 'no fuss' mayorICYMI: Today's letters: Thanks to Jim Watson, Ottawa's 'no fuss' mayor
Read more »

Dogecoin [DOGE] holders fretting over their investments should read thisDOGE was one of the top memecoins in terms of social activity BabydogeSwap launched its new USDT/DOGE farm Dogecoin [DOGE] recently made it to the news as it ranked second in the list of top meme coins in terms of social activity as per LunarCrush. This development demonstrates the memecoins’ popularity in the crypto industry […]
Read more »

Ethereum [ETH]: To avoid being a part of exit liquidity, read thisEthereum whales begin coin distribution as alt’s price continues to fall. Most ETH holders have held at a loss since the FTX collapse, and investors have since lost conviction of any positive price growth in the interim. As the general cryptocurrency market makes an attempt to recover following FTX’s sudden collapse, top whale addresses holding […]
Read more »

Tax increase could have chilling effect on Canada’s beer sectorCanada’s beer sector isn’t raising a cold one to Chrystia Freeland, and many consumers might not either. An inflation-indexed alcohol tax increase of 6.3% is expected to begin April 2023, which some argue will leave buyers and brewers feeling the pinch.
Read more »