Japanese Government: Drink More Sake!
When you tax sin, you need more of it.
Guardian (“Japan launches nationwide competition to boost alcohol consumption“):
The Japanese government has launched a nationwide competition calling for ideas to encourage people to drink more alcohol after a change in attitudes among the young resulted in a slide in tax revenues.
The Sake Viva! campaign, which is being run by the National Tax Agency (NTA), asks 20- to 39-year-olds to come up with proposals to help revitalise the popularity of alcoholic drinks, which have fallen out of favour because of lifestyle changes during the coronavirus pandemic and among young people.
The competition, which runs until 9 September, calls for “new products and designs” as well as ways to promote home drinking. Entrants are also encouraged to explore sales methods using the metaverse, according to local website JiJi.com.
The NTA said alcohol consumption in Japan had fallen from an average of 100 litres a person a year in 1995 to 75 litres in 2020. The decrease in alcohol sales has hit Japan’s budget, which is already running a deficit of more than ¥48tn (£290bn)
Taxes on alcohol accounted for 1.7% of Japan’s tax revenue in 2020, down from 3% in 2011 and 5% in 1980. Total revenue from tax on alcohol in the 2020 financial year fell by more than ¥110bn to ¥1.1tn, compared with the previous year, the NTA said earlier this month. It was the biggest fall in alcohol tax income in 31 years, according to the Japan Times.
“As working from home made strides to a certain extent during the Covid 19 crisis, many people may have come to question whether they need to continue the habit of drinking with colleagues to deepen communication,” an official at the agency told the English-language newspaper at the time. “If the ‘new normal’ takes root, that will be an additional headwind for tax revenue.”
This is both amusing and frightening.
While I personally pay my fair share—and that of a couple of others—of alcohol taxes, I’m pretty sure that governments shouldn’t be encouraging their citizens to drink more of it, given that some number will become alcoholics and a larger number will suffer ill health effects.
At the same time, this is what happens when you structure the revenue stream around “sin taxes.” Governments simultaneously want us to smoke, drink, and speed less but rely on the fees they impose on those who do those things to fund basic services. That creates bad incentives. It’s a big reason why liquor stores were an “essential” business during the COVID lockdowns.