Thanks to the good people at Deutche Bank, and via Business Insider, you now know where to travel around the world to get the cheapest cigarettes and beer. Having compared 50 cities in major developed and developing countries, you probably won’t be surprised to know that Australia is somewhere in the “freaking expensive” to “extortionate” range:
And for a glass of beer:
Australian prices in both cases are so high because the government loves the sin taxes as a source of revenue. In fact, 80 per cent of the cost of a pack of cigarettes is now excise, with GST being another 10 per cent. For beer, one third of the price is excise, and another 10 per cent GST.
Welcome to the low taxing Australia, people. As with everything else, the money grab is clothed in good intentions – getting people to smoke and drink less for the sake of their health – and it does work, up to a point. No doubt some of the decrease in the rate of smoking over the past decade or two is due to the pleasure increasingly costing an arm and a leg (in this case metaphorically, though if you’re not lucky literally). But it’s getting to that ridiculous stage where the taxes can’t possibly get any higher – but they will; probably until the actual cost of cigarettes makes up less than 5 per cent of their price. As many have noted before, the same people who believe that increasing sin taxes will make people sin less somehow don’t believe in this simple economic principle when applied to income or business tax. In any case. it hurts a lot more because the government seems to be pissing so much of the tax revenue up against the wall. If only we could tax taxing maybe the state would be a lot smarter about what it collects and how it spend it.