Is the tax on alcohol too high?

[chem1st 10]

Were they really distilling vodka?

 

According to local news reports, they were brewing a liquid with a high enough amount of alcohol to possibly blind and / or kill you and attempting to sell it off in vodka bottles

The news reports contained many many errors, designed to scare people away from purchasing DUTY free alcohol.

 

In Russia a bottle of Vodka costs £2, but people still make their own and avoid paying the tax. They did try raising the price, but it backfired, and they had to reduce it.

 

Alcohol is 'ethanol', the strength (abv %) corresponds to the amount of ethanol present.

 

The problem with distilling is that people can make methanol (a different type of alcohol) accidentally by distilling at the wrong temperature, or an explosion can occur due to evaporation of ethanol and the resulting gas(fuel):air mixture in the immediate area.

 

This is one of the reasons distilling is illegal, along with the tax issue.

 

People are already distilling to avoid duty, many have and always will, but now the price is encouraging the amateurs, and accidents are likely to happen.

 

This could be avoided if tax upon alcohol was lowered.

[chem1st 10]

Surely the tax is added on at a percentage isn't it? So it wouldnt be the same amount off both, they would be reduced by the same percentage but how much that is depends on the original price.

 

I assume this anyway haha, I dont actually know for sure, but most tax is dealt with in percentages

 

For alcohol there is a fixed some of duty for different types of drinks, with different rates set for different bands of alcohol strength. VAT is then charged on top of this at a rate of 20% (however this is done after the price of the beverage has been set).

 

Beer for example...

 

£18.57 per hectoLitre per cent of alcohol in the beer.

 

=£18.57 per 100 Litre per cent of alcohol.

 

Take for example a 500ml can of stella (5%abv)

 

500ml is one 200th of a hectoliter.

 

£(18.57/200) * 5 = DUTY = 46.425p

 

with VAT @ 20%

 

that is 55.71p.

 

You won't find a supermarket selling half litre cans of stella for less than 56p.

 

60 pence maybe. Then they can make a profit.

 

These taxation bands lead to some funny practices, just take a look at the ciders in your local off license, many of them will be 7.5% abv, but none will be 7.6% abv, the duty would be nearly twice as much due to how it is calculated.

 

The tax on a bottle of vodka 70Cl, 37.5% is £6.70.

 

You can pick one up from the shop for £8. They make a profit.

 

You can easily make your own for under £1.

 

Duty free vodka is massively profitable, more so than most illegal drugs.

[andikay 10]

Is the tax on alcohol too high?

 

No, doubling it would provide more funds to pay for the problems associated with alcohol abuse.

[Obelix 11]

Surely the tax is added on at a percentage isn't it? So it wouldnt be the same amount off both, they would be reduced by the same percentage but how much that is depends on the original price.

 

I assume this anyway haha, I dont actually know for sure, but most tax is dealt with in percentages

 

No, it's dutied at a fixed rate per litre depending on how it was produced.

 

Beer duty is currently at a rate of £18.57 per hundred litres of product per cent in the beer. So a litre of 1% beer will have £0.18 of duty, a 5% beer will have £0.90 per litre on it.

 

Wines and perries are split into bands. eg still wine 5.5% - 15% is £241.23 for a hundred litres, wines 15% -22% are £321.61

 

Spirits are charged at a straight rate by the alcohol content of £25.52 per litre of alcohol present, so you have to work it out from the ABV. Wines about 22% are classed as spirits even if not distilled.

 

This makes the lower floor for supermarket whisky quite obvious - at 25.52 a litre then a 37% whiskey will be dutied at £7.08 minimum. Hence you can see just how little margin there is on the cheap stuff and why the quality and taste is so poor.

[gnvqsos 10]

Cutting tax on alcohol would destroy the malt whisky industry. Supermarket cheap whisky is currently around 1/3 the price of a decent malt.

 

Knock a fiver off a bottle of Tesco Whisky and you get the price down to £3.50. Do the same for a Glen Morangie and you drop the price down to £24.50. All of a sudden its gone from 3 times the price to nearly 8 times the price, and thousands of scottish workers will be out of a job, and the Government will just make up the tax loss elsewhere.

 

I am sorry but 85% malt is exported and few jobs will be affected as the extra demand for blended will create work for the displaced.In fact it is like ly to increase jobs.Are you suggesting the raw cost of malt is 8 times the cost of blended liquor?

[Fibutton 10]

Blimey...this thread could be about drugs......street value, making your own, etc.

 

The tax on everything in this country is too high, and how much good has it done the economy? As for whisky makers losing their jobs, I'm sorry that ANYONE has to lose their job, but give me a community worker working with poverty stricken families - well I know which I would fund first!

 

Don't get me wrong, I love a glass of wine, and yes I am a smoker (albeit social). I work full time and pay my taxes, but I do feel ripped off when I pay about a third of my salary to the government already.

[chem1st 10]

Blimey...this thread could be about drugs......street value, making your own, etc.

 

The tax on everything in this country is too high, and how much good has it done the economy? As for whisky makers losing their jobs, I'm sorry that ANYONE has to lose their job, but give me a community worker working with poverty stricken families - well I know which I would fund first!

 

Don't get me wrong, I love a glass of wine, and yes I am a smoker (albeit social). I work full time and pay my taxes, but I do feel ripped off when I pay about a third of my salary to the government already.

 

This is the problem.

 

Economic prohibition.

 

It causes more problems than the good intended. They want to discourage people from drinking (and smoking), and by doing so, they force drinkers to consume alcohol (and tobacco) from the black market and lose tax revenue whilst diverting funds to criminals.

 

The black market in cigarettes and alcohol is booming, and its is unregulated.

 

Some of the products are of a very high quality, and some very low.

 

Taxation shouldn't economically prohibit an activity. It should be used to ensure minimum standards, and any surplus used for the greater good.

 

I want lower tax on cigarettes and alcohol (I currently avoid duty on tobacco 100%, and alcohol perhaps one third to one half of the time I'll consume homebrew, rather than imported lager (sometimes smuggled), supermarket wine etc.), but I want TAX introduced upon cannabis. I want it regulated by the state, and I want it taxed, I want the funds to go towards the greater good.

[chem1st 10]

No, doubling it would provide more funds to pay for the problems associated with alcohol abuse.

 

http://en.wikipedia.org/wiki/Laffer_curve

 

The media is currently awash with stories about falling tax revenue wrt cigarettes and alcohol.

 

And also decreasing sales of cigarettes and alcohol.

 

The black market is booming.

[gnvqsos 10]

Blimey...this thread could be about drugs......street value, making your own, etc.

 

The tax on everything in this country is too high, and how much good has it done the economy? As for whisky makers losing their jobs, I'm sorry that ANYONE has to lose their job, but give me a community worker working with poverty stricken families - well I know which I would fund first!

 

Don't get me wrong, I love a glass of wine, and yes I am a smoker (albeit social). I work full time and pay my taxes, but I do feel ripped off when I pay about a third of my salary to the government already.

 

You must be on top rate tax love and eraning over £50000 to pay a third!Well done.

[Happ Hazzard 10]

Beer in shops is too cheap and beer in pubs is too dear.