Vexed Bermoothes

A few late night thoughts on taxes:

Government’s new boat tax encourages elitism. Raising the import tax on boats to a walloping 55% makes boating an option for the rich alone. It’s ludicrous that an island – with a seafaring tradition going back centuries – would restrict access to the ocean, particularly given the social pressure of Bermuda’s overcrowding on land. Moreover, sailing is one sport that Bermudians have reached world class status – this sport should be encouraged not penalised. Finally, the boat tax is a lousy revenue generator (Government briefly raised boat taxes in the 1980s and quickly reversed course as revenues fell).

Meanwhile, the modest increase on the cigarette “sin tax” doesn’t make sense. Government should be doing all it can to stop smoking, not squeezing a few extra nickels from the vice. A recent study from MIT and the University of California calculates that in the United States, “the monetary value of the health damage from a pack of cigarettes is over $35 for the average smoker, implying both that optimal taxes should be very large and that cigarette taxes are likely progressive.” That’s because smokers face the choice between long-term desire to quit and the cost of pleasure. Raise the cost of a pack of “coffin nails” to its true level, and the choice to quit is simple.