Daily Diversions (Web Log)

David's Mental Meanderings
5th March 2000

As the saying goes, two things in life are certain. In the case of death, you will recall this is primarily due to the National Health Service. As for taxes, these are due, well, in fact, to the National Health Service.

Okay, that's not entirely true. The NHS does cause a significant involuntary transfer of funds from the private to the public sector, but it's almost unnoticeable when added to all the other taxes we pay. As always, here are some examples:

In the US, about 33% of the retail price of gasoline is a direct tax on the consumer. In the UK it is 80%. Stripped of taxes, the cost of petrol is roughly the same. As it is, we pay nearly $5.00 per gallon. It doesn't look so bad when the sign outside the gas station reads "75.9". Then the translation process begins. Changing from pence to cents involves multiplying by 1.7. Then changing from litres to gallons adds a factor of 3.785.

The situation is due to get worse. Now that the price of crude oil is continuing to rise, it is speculated that price of gasoline will top £4.00 ($6.80). The combination of cost increase and taxes on that increase will add 26 pence to the price of a gallon.

I have to admit that the longer I get here, the more I think British and don't bother with the translation. I get paid in pounds and I spend in pounds. So instead of thinking that a rise of a penny in the price is an additional 6.5¢ per gallon, I just complain that I'm being robbed by the socialist government.

And they want to put more taxes on petrol, because they can't get the British public to stop driving. The Secretary of Environment, Transport and the Regions goes around making lots of speeches about how the British people must give up their love affair with the automobile and rely upon a public transport system that is the joke of Europe. And he usually arrives in one of his two Jaguars.

Enough about gasoline. There are plenty of other taxes to pay, like sales tax, or as they call it here, VAT. Americans pay between 4% and 8% in sales tax on retail goods. Here we pay 17.5% on almost everything. It's sneakier here, though. In the States, you are conscious of what you are paying in sales tax, because it's added to the price at the register. Here, it is already in the price.

This makes it easier to add up your purchases as you shop. What is on the sticker is what goes into the till. Ah, but convenience has its price. You walk home (walking, of course, to avoid all those nasty petrol taxes) not even realizing that 1/6 of what you paid was sucked up by that greedy socialist government.

And for only £9.00 ($15.30) per month, we can watch television. No, this isn't the cable bill. This is the bill for broadcast television. It's call the TV license. Yes, we have to have a license to operate a television. If we are found operating an unauthorised boob tube, we will be fined £1000 ($1700). The fee is imposed to fund the BBC television. Even if we decline to watch the Beeb, and choose one of the three commercial channels instead (which we are unlikely to do on Monday, Tuesday, and Thursday, lest we miss "Eastenders,") we must still pay.

It must be said that Britain has one of the most favourable tax regimes in Europe. All the other governments in the European Union (and the Eurocracy in Brussels) are constantly harping on the British to raise taxes. They see that the UK has too much to offer business investment and the labour force. This, they believe, is entirely unfair.

There is one exception. Yes, it is the automobile. Out of the whole of Europe, cars are the most expensive to purchase as well as to operate in the UK. New cars are usually at least 20% more expensive here than on the Continent. It is a common practice for Brits to order a car in France or Germany and go over and pick it up. The amount they save exceeds the cost of the nice two-week vacation, import duty and the extra fees paid to register the foreign-built vehicle.

You can probably see how company cars are a bigger perk here than in the States. With an employer picking up the costs of taxes, insurance, and maintenance, it's an offer that's hard to refuse. I certainly didn't.