Tuesday, April 17, 2018

Tuesday Morning Links

This and that for your Tuesday reading.

- Paul Krugman writes that a transition to a clean energy economy is well within reach - as long as politicians don't put the interests of oil money over our economic and environmental future. But Gordon Laxer notes that NAFTA already limits Canada's ability to take the steps which would do most to rein in our harm to the planet.

- Meanwhile, Peter Martin makes the case for a sugar tax and other Pigovian taxes - as adaptations to avoid a tax may produce substantial benefits in important policy areas such as public health:
Announcing the sugar tax in the 2016 budget, Britain’s (Conservative) Treasurer George Osborne said five-year-olds were consuming their entire body weight in sugar every year.
His hope was that the drinks above each threshold would cut their sugar until they were below it. It’d cut their tax from 24 pence per litre to 18 pence, or from 18 pence to nothing. They had two years in which to do it.

Within months, Tesco said it would reformulate its entire range to escape the levy. Lucozade Ribena followed, also for its entire range. It meant halving the high sugar contents of Lucozade and Ribena.

Then Sprite halved its sugar content, Fanta fell from grams 7 to 4.5, and 7 Up from a scary 11 grams to 7 grams.

By the time the tax arrived last week, Britain had more than halved its initial estimate of what the tax would raise, cutting its estimate for takings in the first year from £520 million to £240 million ($439.6 million to $952.5 million).

The government-owned Behavioural Insights Team reckons around 750 million litres of drink has been reformatted, which would save a welcome 30,000 tonnes of sugar per year, all before day one.
There’ll be more change now the tax is in place. Retailers will more prominently display the cheaper drinks that are lower-taxed, producers will shift their marketing to products they are able to sell for less, and customers comparing prices will be more likely to pick the cheap ones. More manufacturers will cut their sugar content as a result, and even those that don’t will sell increasing amounts of their zero-sugar products and less of those with sugar.

After a while, the sugar tax might raise very little. Which was the idea. The universal truth about tax is that people don’t like paying it. It can be put to good use.

Australia did it with petrol. From 1994 we more heavily taxed leaded petrol, pushing up the price by 2 cents per litre to encourage drivers to switch to unleaded. We do it with tobacco, and, imperfectly, with alcohol.

What’s great about so-called sin taxes (or "Pigovian taxes") is the double pay-off. Taxing more the things we want less of, including things that kill people, allows us to tax less the things we want more of, such as jobs, income and savings.
- Matt Bruenig points out that the wage gap between women and men is substantially larger than usually assumed when part-time and unpaid work is taken into account, then examines the gap across the income spectrum.

- Robert Devet comments on the need for both fair laws which protect workers, and effective enforcement which prevents employers from flouting the rules.

- Finally, Adrienne Tanner argues that British Columbia needs a public inquiry to investigate the role of money laundering in driving up housing prices. And Christopher Cheung looks to Singapore for an example of a targeted property flipping tax.

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