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Tesco boss – tax them over there to benefit me and mine

Summary:
It’s necessary to call this out for what it is. This isn’t a careful and considered attempt to work through the problems that assail us. It’s a naked insistence that them over there must be taxed to benefit me and mine:Online retailers should pay new sales tax to support struggling British high street shops, Tesco CEO saysWe might even think this an admission that Tesco’s online adventures aren’t going well given the demand to inflict extra taxation upon the sector.Internet giants such as Amazon should pay a new sales tax to support shops on the struggling British high street, the boss of Tesco has said.Dave Lewis, who has been the CEO of Tesco since 2014, warned that the current business rates system is “unsustainable” as many shops are facing crippling bills on their properties while

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It’s necessary to call this out for what it is. This isn’t a careful and considered attempt to work through the problems that assail us. It’s a naked insistence that them over there must be taxed to benefit me and mine:

Online retailers should pay new sales tax to support struggling British high street shops, Tesco CEO says

We might even think this an admission that Tesco’s online adventures aren’t going well given the demand to inflict extra taxation upon the sector.

Internet giants such as Amazon should pay a new sales tax to support shops on the struggling British high street, the boss of Tesco has said.

Dave Lewis, who has been the CEO of Tesco since 2014, warned that the current business rates system is “unsustainable” as many shops are facing crippling bills on their properties while battling competition from online rivals who pay much less.

Mr Lewis called for these high street stores to get a 20 per cent reduction on their business rates, to be paid for with a 2 per cent levy on online retail sales.

There is that technical problem with this. Business rates are incident upon landlords, a sales tax upon online would be incident upon consumers. A reasonable assumption therefore would be that the boss of Tesco is looking at how his business is a substantial landlord and not a substantial consumer.

Pfft. Treat the suggestion with the contempt it deserves therefore.

However, there’s a bigger problem underneath this. Why should we help out struggling high streets?

Sure, at one stage of technological development that was the best manner of gaining the retail services we desire access to. But technology changes - as does fashion - and the optimal answer to one generation isn’t so for another. All this internet stuff now means that the high street is no longer optimal. Or at least isn’t for that 18% or so of retail sales which now take place online.

We’ve today also an example of how fashion changes:

You can barely throw a stick without hitting a man sporting an immaculately groomed beard.

The trend for male facial hair has seen barbers become the fastest growing shops on the British high street, bucking the downturn that has seen fashion stores close at a rate of knots.

Barber shops were the fastest growing retail category in 2018, with 813 units opening.

It was a similar story the previous year, when 624 opened and analysts say that numbers are already outstripping growth again this year.

If the high street was still full of those electronics retailers who have fallen victim to internet sales we’d not have the room to cater to this change in human desires, would we?

The basic truth about economies being that what it is possible to do changes as technology does, what we want done changes too as fashion does. The trick is to enable the move from the old to the new to happen with the least friction possible so as to continue to gain that additional value creation. You know, that more GDP which is economic growth.

This obviously meaning don’t tax the new in order to subsidise the old thereby preventing that change and that growth. Dave Lewis’ demand for an online sales tax is both grossly self-interested and also wrong. So better if we don’t do it, eh?

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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