UK: Charity Calls for ''Sin Taxes'' to be Cut to Help Poorest Households  

Source from:  The Information Daily 10/16/2013

Taxes on fuel, alcohol and tobacco should be cut by half, green energy subsidies scrapped and VAT reduced to 15 per cent in order to relieve the pressure of the poorest households, a charity has said.

The Institute of Economic Affairs, in a report published today, reveals that the poorest households pay on average 37 per cent of their gross income in direct and indirect taxes, compared to the richest quintile who pay 15 per cent.

The report, titled Aggressively repressive: The 'sin taxes' that make the poor poorer, argues that these 'sin taxes', such as betting taxes, aid passenger duty, and duty on tobacco and alcohol, must be reduced to "to help those finding it most difficult".

Christopher Snowden, the author of the report, said: "It is clear that an increase in taxes on the goods families consume is making life harder for people".

"This is especially true for the poorest who spend a much higher proportion of their income on high taxed products such as alcohol and tobacco".

The report finds that the poorest 20 per cent of households in Britain spend an average of £1,286 per year on 'sin taxes', which represents 11 per cent of their disposable income.

The average smoker from the poorest fifth of households spends between 18 and 22 per cent of their disposable income on cigarettes, with the tax on these cigarettes consuming 15 to 17 per cent of their income.

Motoring taxes also absorb 8 per cent of the income of a typical driver from the bottom fifth of households whilst alcohol taxes consume 2 to 4 per cent of the income of moderate drinkers in the bottom fifth of households.

Snowden added: "At a time when many families are struggling to get by, it's clear that reducing taxes would help those finding it most difficult". Enditem