Wine, tax, hissing, and frogs...

Ok ok ok, I get it, we all need to pay tax.  But why are some taxes so high?  As Jean-Baptiste Colbert (treasurer to the Court of Louis XIV in the 17th century) is supposed to have said, the art of successful taxation is like plucking geese and obtaining the maximum number of feathers with the minimum amount of hissing.  So here’s my question; why isn’t there more hissing when it comes to the taxation on wine? (a subject dear to my heart)

The average bottle of wine in the UK sells for £5.04 according to a report published this year by The Drinks Business.  Of that a whopping £2.84 of that price is tax, that’s 56% of the total purchase price (or a tax of 129% on the bottle) going straight to the exchequer.  Don’t forget that you would have already paid tax on the money that you have earned to buy that bottle in the first place.  If you are a 40% tax payer you will have earn (at the margin) £8.40 (let’s ignore NI contributions) to buy something that costs just £2.20, the rest goes straight to HMRC.

Wow!  So what do you get for your £6.20?  Well, we could take a look at the various websites that purport to give us visibility over where our tax pound is going, but they invariable either come from the perspective of “the government takes too much of my money and gives it to the feckless poor” or “if somebody earns *that* much then they should should stop complaining about having to pair their ‘fair share’”.  So let’s leave the politics to others and get back to the question at hand.  Why isn’t there more hissing?

The answer presumably lies with the gradual way taxes are introduced and then increased.  We don’t hiss very much for the same way that the frog doesn’t jump out of the pan of water that is gradually boiled.

So, what’s my point?  Well, I think that the way we treat the people that make our clothes probably started out luke warm (to stick with the frog analogy), but with every push on costs & slightly faster turn-around, over decades, the water is now boiling.  Nobody would choose this as a way to treat the person who makes their clothes, but somehow we’ve drifted into it.  What’s needed now, is a way for us to collectively turn the heat down.  Answers on a postcard please.