Ok people. It appears that many of you never studied economics at school. All these rants about it not working because of the compensation suggest a distinct lack of economics. So here you go. Economics 101 using a coffee tax instead.
I spend $20 a week on coffee, a cup a day at $4 a pop. The socialist/ green eugenic nazis decide that coffee is bad for the country as too many wired people wandering around high on caffeine. And of course the socialist/ green Eco-nazi communists love a new tax. So they bring in a coffee tax at $6 a cup but decide to compensate me by giving me $30 (that is $6 times 5 days) as an income tax cut.
So I have $30 extra in my pocket. If I continue to buy a cup a day I am no better or worse off. But I think $10 is a bit rich for a cup of coffee so I buy less.
