Minimum Unit Pricing

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Re: Minimum Unit Pricing

Postby NoPunIn10Did » 27 Apr 2018, 16:09

sinnybee wrote:Health benefits + potential money + money > health benefits + potential money.


I certainly agree that a tax would accomplish much the same thing and would bring a more sure source of government revenue. I was not aware that Scotland can't raise taxes unilaterally, but that would explain why their government may have targeted minimum price instead.

The tricky thing about minimum price restrictions versus taxes is how it impacts the market. A tax of comparable magnitude can have all the same demand impacts, but the burden is shared more evenly by all competitors. MUP is less of a pro-free-market maneuver; it's more likely to "pick winners" since it hits the low-quality producers much harder than the high-quality ones.

In addition to the public health concerns, there may have been some adjacent protectionist interests involved wishing to benefit the local Scottish alcohol producers at the expense of cheaper imports.
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Re: Minimum Unit Pricing

Postby V » 27 Apr 2018, 16:28

“In addition to the public health concerns, there may have been some adjacent protectionist interests involved wishing to benefit the local Scottish alcohol producers at the expense of cheaper imports”.

Definitely not. The main opposition to this Scottish Government “initiative” was the Scottish Whisky industry, who held up implementation in the courts for over 5 years, on the basis it restricted Free Trade. If it’s “protectionist” then the “protected” are those most upset :D
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Re: Minimum Unit Pricing

Postby NoPunIn10Did » 27 Apr 2018, 16:46

V wrote:“In addition to the public health concerns, there may have been some adjacent protectionist interests involved wishing to benefit the local Scottish alcohol producers at the expense of cheaper imports”.

Definitely not. The main opposition to this Scottish Government “initiative” was the Scottish Whisky industry, who held up implementation in the courts for over 5 years, on the basis it restricted Free Trade. If it’s “protectionist” then the “protected” are those most upset :D


Aha, interesting. I wonder if it's the local producers who were the ones able to undercut the imported competitors, rather than vice-versa...
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Re: Minimum Unit Pricing

Postby Jegpeg » 28 Apr 2018, 03:03

I am not going to get into the Scottish independence debate, other than saying the majority of people in California didn't vote for Trump but they still have him as president (and if there was a referendum for Californian Independence I am sure it would not succeed). At least had a (legal) referendum unlike Catalonia.

Back to alcohol pricing.

All governments need to raise taxes and it is very common to tax vices like alcohol either to try and deter people from over-indulging in them or to pay for the costs incurred by government because if it (e.g health costs for alcohol related diseases or policing drunk and disorderly behaviour).

Unfortunately alcohol duty in the UK defies logic as the chart below shows.
Duty on spirits is a flat 28p a unit which seems a reasonable approach.
Beer is also taxed at a rate per unit of alcohol but due to concern some people were drinking super strength beer to get drunk quickly and causing trouble it was decided to tax stronger beer at a higher rate per unit, there is at least some sort of logic there.
Wine is taxed by total volume with steps different rates for different bands of alcohol content, so on a per unit basis 5.5% wine is taxed at half the rate of 5.6% wine.
Cider is also charged by total volume with only one small step up in rate for ciders above 7.5% alcohol. Strong cider is not cheap alcohol because it is cheap to produce it is cheap because it has a very low rate of tax.

As Pootleflump pointed out the Scottish government can't set duty rate in Scotland (but to put him right they do have one tax raising power in that they have some control over the rate of income tax) so this minimum pricing is a way to raise the cost of the cheapest alcohol, it might actually raise tax income if people who currently buy cider because it is cheap switch to, say, beer because they prefer beer and they are now both 50p/unit of alcohol.

I think the tax code should be a simple as possible so would prefer a flat rate per unit of alcohol for all drinks.

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Re: Minimum Unit Pricing

Postby musashisamurai » 29 Apr 2018, 05:59

V wrote:What if it was the medical professionals who told the politicians to raise the minimum price?

I’d buy into the “reasonableness” of this particular tax more than most, under those circumstances. Was it? Or just the money grabbing politicians as usual?


That would be a sin tax, but at least a sin tax proposals have the new revenue spent on alleviating the problem (such as funding for helping mitigate alcoholism, improving mental health, etc).
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Re: Minimum Unit Pricing

Postby musashisamurai » 29 Apr 2018, 06:21

willie23 wrote:Is it really the Governemnt’s place to step into the economy and mess with prices and stuff? What about educating the public throughly on the dangers of over drinking alcohol...and if they wish to continue to destroy their own bodie’s then they can. Everyone has the right to do as they wish to themselves as long as it does not endanger other people or infringe on their own rights, and increasing the price on a product will not really stop the over consumption, it will only make things harder on the businesses and the poor. In the USA it is illegal to drive drunk, and that makes sense. But a minimum unit pricing seems like a solution that will not work. And from there, where does it go next?

At the same time, I am no economist. Am I missing something here? As far as Governemnt intervention in the business areas...I have always thought that the Governemnt should stay out of it.

Most Respectfully,
Willie


The government controls and sets prices all the time, often to great effect. While competition is great, not every industry or service translates well to it-for example, healthcare and capitalism as seen by comparing America to literally every other Western country-and a certain degree of policing is important. Setting a minimum wage for example is important because otherwise Ricardo's Iron Law of Wages would have a number of salaries shrink to levels that simply won't enable low-income Americans to make any money (and since those citizens are massive consumers, higher wages == better economy). Even the thinkers behind laissez-faire economics like Adam Smith (founder of economics) or Thomas Jefferson (president, huge supporter of it) knew the government needed to get involved at time. Smith pointed to the government's role in risky, high capital endeavors that had great public interest-in his day, making canals, highways, and exploring the world to find new trade routes. Nowadays, this would probably still translate to transportation infrastructure but also include emergency services and research/research grants. Jefferson meanwhile buys the Louisiana Purchase and hires explorers to traverse it.

Later in the 20th century, John Maynard Keynes was born. His economic theories, to the best of knowledge, have never been disproven. He essentially theoried that greater government, even deficit spending during recessions, would alleviate the recession and cause a resurging boom; during growth periods, governments should then save money for the next recession and spend their way out of the recession. Those theories would find some credit in the administration of FDR who used them for the New Deal, and the massive spending of WWII brought us out of the Depression. I guess you could say that the Axis used the same theory, but not for economic restoration.

In short, though, there's never been a period where the government has fully ignored the economy and many times where the government has caused large success. In my time, there have also been times where government neglect and deregulation have horribly effected the economy, such as repealing the Glass-Steagall Act and loosening financial regulations before 2008. I'm pretty sure that minimum pricing has been used in the USA/EU to help boost agriculture and maybe dairy, though I suppose that grants are more common. Price ceilings are more common AFAIK, especially with rent and insurance.

Another debate, another time, but I don't think the existence of government is one we need to debate. In this circumstance though, I think this is the Scottish government trying to impose a sin tax (which is less economic theory and more public health and political science) without the ability to impose an actual sin tax. Personally, I feel for them but raising the minimum price likely won't have the same effect as a sin tax since the new revenue can't be spent on alleviating the problem. Its like if my hometown which now does 5 cent 'taxes' on plastic bags decided the best use of that revenue wasn't some grants to promote high efficiency electronics or home improvements but instead should be used to build high pollution factories or oil wells. Its slightly worse because the sin tax half has a negative effect on consumers, and this implementation lacks the positive parts of it.
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Re: Minimum Unit Pricing

Postby sinnybee » 29 Apr 2018, 09:19

Sorry, Pootle, this is off topic, but I want to respond to musashisamurai... and I also feel the need to rant about Americans in general...

musashisamurai wrote:Later in the 20th century, John Maynard Keynes was born. His economic theories, to the best of knowledge, have never been disproven. He essentially theoried that greater government, even deficit spending during recessions, would alleviate the recession and cause a resurging boom; during growth periods, governments should then save money for the next recession and spend their way out of the recession. Those theories would find some credit in the administration of FDR who used them for the New Deal, and the massive spending of WWII brought us out of the Depression.

And what about the Austrian School--laissez-faire-economics? Has that been disproven?

I'm all for Keynesian economics, but it likely hasn't done Americans much good since the Depression. I think that Obama was a good president and that the Obama administration tried their best to help the US recover from the recession and had a lot of good ideas, but that most job creating programs took a good bit of time to implement and were mostly for a small number of worker types, like construction workers.

The biggest problem with Keynesian economics in the US, is the lack of "[saving] money for the next recession".
When does the US save money? Never. We have such a ridiculous and embarrassing national debt that keeps getting bigger and bigger.

Democrats often want to spend more money. We can't afford that!
Republicans often want to lower taxes. We can't afford that!
Even Democrats don't complain to me, their tax preparer, when they get extra money due to new tax laws.
They want money now and ignore the fact that America will head for bankruptcy or worse tragedies if we don't start seriously paying off the national debt.
So, essentially everyone wants lower taxes and never wants taxes raised unless it's raising taxes for the rich.

Americans as a whole are selfish, impatient, willing to get into a lot of debt for inadequate reasons, and certainly not financially responsible enough to save much if anything during times of prosperity. Instead, we get into more and more debt.
President Bill Clinton boasted of budget surplus in the 90s, but it was to such a small extent. When have we as Americans ever been fiscally responsible since "the New Deal, and the massive spending of WWII"? In my opinion, never.
Instead, politicians just use Keynesian economic theories as an excuse to spend money, and then later, no one takes responsibility for needed serious budget surpluses in times of plenty.

I would definitely vote for someone who said that they were going to raise taxes and get rid of increases in spending e.g. to the military, for the purpose of paying toward interest crippling debt, but no one else seems willing to vote for someone who's actually willing to be fiscally responsible. Politicians say that the national debt is too high, but what t f do they do about it? Nothing, mostly because Americans will curse at someone who tries to raise taxes or significantly reduce spending.

In addition to significantly saving / paying off debt, for Keynesian economics to work properly, necessary government spending that isn't time sensitive should be done in times of recession and plans for it should be made ahead of time, so that they can be implemented quickly (so that the government doesn't instead try to think of silly things to spend money on during a recession like building a turtle fence https://youtu.be/qizNQKzatXA?t=14s).

Rant over.
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Re: Minimum Unit Pricing

Postby boldblade » 30 Apr 2018, 18:13

musashisamurai wrote:Another debate, another time, but I don't think the existence of government is one we need to debate.


Oh it certainly is. No form of organization in history has done more to kill and destroy humans. Many people will disagree and say religion is worse but it is only worse when it takes on state-like features. Individual radicals and extremists, while awful, have done minimal harm compared to times where states were organized around religion and then unleashed on the heretics or unbelievers.

As for the rest of your post.... I will leave it alone here since Sinnybee had a pretty good response already and I hate to derail this further. Burt seriously, please please please open your mind to the possibility that government is not your friend. You may think they are and they do a lot to help you and lift you up and make the world a fairer place for you. But please I am begging you consider the other side. Consider all the most horrific things that have happened in human history and look at who was responsible. If you want to argue that a type of organization capable of mass killing and destruction is the same type that should control other everyday aspects of your life I think you will have a hard time wrapping your mind around both realities.
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Re: Minimum Unit Pricing

Postby Buachaille » 30 Apr 2018, 20:43

boldblade wrote:
musashisamurai wrote:Another debate, another time, but I don't think the existence of government is one we need to debate.


Oh it certainly is. No form of organization in history has done more to kill and destroy humans. Many people will disagree and say religion is worse but it is only worse when it takes on state-like features. Individual radicals and extremists, while awful, have done minimal harm compared to times where states were organized around religion and then unleashed on the heretics or unbelievers.

As for the rest of your post.... I will leave it alone here since Sinnybee had a pretty good response already and I hate to derail this further. Burt seriously, please please please open your mind to the possibility that government is not your friend. You may think they are and they do a lot to help you and lift you up and make the world a fairer place for you. But please I am begging you consider the other side. Consider all the most horrific things that have happened in human history and look at who was responsible. If you want to argue that a type of organization capable of mass killing and destruction is the same type that should control other everyday aspects of your life I think you will have a hard time wrapping your mind around both realities.


It actually goes much deeper than this Boldblade :o Beyond government or even humans organising themselves in any shape it form it goes right to the very species themselves. I cannot even bring myself to buy any alcohol (minimum unit priced or otherwise) from a species capable of being a 'serial killer' or a 'shop assistant' and have very, very difficult time wrapping my head both realities :shock:
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Re: Minimum Unit Pricing

Postby boldblade » 30 Apr 2018, 21:01

Yes a government has a capacity for good and for evil as does a human. However, your analogy breaks down when you compare serial killing to genocide.
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