goverment and fuel duty again !

zain · 26 Feb 2012 at 20:23

[TW]Fox;21349502 said:
This is not true. It is relatively price inelastic not absolutely price inelastic. Case in point - would you change your car if duty on unleaded was £5 a litre? Yes you would.

Infact the rising tide of diesel vehicles on the road - purchased for perceived efficiency - is testement to this.

You've gone off what I was saying and avoided what I asked, it is inelastic, it would not go to £5 per litre unless people were willing to pay, otherwise to reduce smokers they would have charged £100 a packet and charge £50 a litre of fuel.

Fr0dders · 26 Feb 2012 at 20:59

zain said:
You know that fuel duty is inelastic, whatever changes they do will have little to no effect on reduction. What fuel duty is, is not the issue here.

Who said DC receives a new holiday home? You can see yourself from media exposure what MPs get up to with tax payer money, even when Clegg and DC got into power he gave a major contract to his wife, the funds coming from the tax payers pocket. Whoever is in charge of how the income from duty is distributed will no doubt gain some sort of benefit when dishing out who gets what.

zain · 26 Feb 2012 at 21:12

An example

That's just the stuff you get to see through exposure.

[TW]Fox · 26 Feb 2012 at 21:30

zain said:
You've gone off what I was saying and avoided what I asked, it is inelastic, it would not go to £5 per litre unless people were willing to pay, otherwise to reduce smokers they would have charged £100 a packet and charge £50 a litre of fuel.

So it's totally inelastic yet if it went to £5 a litre nobody would buy it? Sounds like its not as inelastic as you think, doesn't it?

They wouldn't set duty at £5 a litre for many reasons, including but not limited to:

a) It is political suicide
b) It is counterproductive as large scale demand destruction would end up REDUCING overall tax take from the duty
c) It would cause considerable economic problems

Ditto tobacco.

[TW]Fox · 26 Feb 2012 at 21:30

zain said:
An example

That's just the stuff you get to see through exposure.

And he did that by increasing fuel duty?

Honestly, go buy more tinfoil.

zain · 26 Feb 2012 at 21:59

You're just trolling now, or need to re-read what you just put.

[TW]Fox · 26 Feb 2012 at 22:09

zain said:
You're just trolling now

Says the guy who ran into a fuel duty thread to explain how its all a massive conspiracy by the government in order to line personal pockets?

I'm not trolling, I'm just pointing out how you don't seem to understand the concept of price elasticty of demand.

zain · 26 Feb 2012 at 22:23

[TW]Fox;21350858 said:
Says the guy who ran into a fuel duty thread to explain how its all a massive conspiracy by the government in order to line personal pockets?

I'm not trolling, I'm just pointing out how you don't seem to understand the concept of price elasticty of demand.

You asked and I told, its not a massive conspiracy, just pointing out that spending involves corruption which increases costs.

I understand elasticity very well, what is it you think I don't understand about it?

[TW]Fox · 26 Feb 2012 at 22:27

zain said:
I understand elasticity very well, what is it you think I don't understand about it?

You think that petrol is a product thats completely price inelastic. This implies that there would be no reduction in demand following any price increase. This is clearly not the case, is it?

Why do you think we are buying more efficient cars? Out of the goodness of our hearts? You think every private buyer of a 2.0 diesel A3 does so because they would have an S3 but want to save the planet?

Petrol is a quite price inelastic but far from completely price inelastic. The higher the price of petrol, the less people buy and the more they seek alternatives to petrol. Therefore by definition it cannot be completely price inelastic.