Chancellors have dabbled in social engineering before,but incentives and punishments don’t always conclude the trickSocial engineering through the tax system is nothing fresh. Both Tory and Labour chancellors have become excited at the prospect of initiatives to encourage spending in one area and discourage it in another.
George Osborne is the latest to give it a try. In Wednesday’s budget the chancellor said he wanted to save the nation from an obesity crisis with a tax on fizzy drinks. He said he was convinced that his levy of up to 24p on a litre of fizzy pop would reduce consumption and reap a tax dividend for the exchequer. The independent forecasters at the Office for Budget Responsibility agreed. Without a change in behaviour, Osborne would be more than £900m a year better off, and but the likely deterrent effect of a higher price would reduce this to £520m.
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Source: theguardian.com