Wednesday, 4 April 2018

It's not a tax, it's an excise

I was laughing so hard this morning on my drive into work that I almost had to pull over. On Morning Report, Guyon Espiner was interviewing our PM Jacinda Ardern, about the government's policy statement on transport, which includes an increase in the fuel excise tax. You can listen for yourself here. Ardern seemed very focused on not referring to the petrol excise tax as a tax. She didn't quite tax Espiner's bait to say, "It's not a tax, it's an excise", but she was really close. I don't think she referred to it as a tax at all in the interview, constantly referring instead to excise.

Of course, Ardern was being careful because the Taxpayer Union has been out in force noting that, according to the New Zealand Herald:
...the government's proposal to increase fuel levies breaks Jacinda Ardern's promise of "no new taxes".
So of course the PM wasn't going to refer to this as a tax. What's the difference? There is no difference. An excise tax is a tax on the sale or production of some good or service. So, when you refer to something as an excise, you are telling us it is a tax. This is pretty clear regardless of the definition of excise. Here's the OED definition:
Excise, n.
1. gen. Any toll or tax.
Or, perhaps you prefer the Merriam-Webster dictionary:
1 : an internal tax levied on the manufacture, sale, or consumption of a commodity
2 : any of various taxes on privileges often assessed in the form of a license or fee
Wikipedia might offer Jacinda some comfort:
An excise or excise tax is any duty on manufactured goods which is levied at the moment of manufacture, rather than at sale.
So, it's not a tax, it's a duty? That comfort lasts only until you look up what a duty is:
In economics, a duty is a kind of tax levied by a state.
It's pretty clear then. A tax by any other name is just as taxing (my apologies to Shakespeare). To be fair though, this isn't the first (and it won't be the last) government to try their hardest not to refer to taxes as taxes. Only a few years ago, the previous government introduced a new "bio-security and customs levy" (see my post on that here). It goes without saying that a levy is also a tax.

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