07 January 2010

Back to Front:

From the BBC:
The UK government wants advice on how to spend the cash being raised for next generation broadband in rural areas.

The cash will be generated by imposing a 50p duty on all fixed line phones.

It has begun a consultation exercise that will hear about who should benefit from the £1bn it is expecting to raise in the Next Generation Fund.
Maybe it's just me, but surely the correct sequence of events for what is being portrayed as a hypothecated tax should be:

Identify the issue
Document a preferred solutionCalculate the cost of the solutionSet the tax accordingly

Not:

Identify the issueSet the taxLook for a solution

otherwise, you're collecting a tax when it might be completely inadequate to fund a solution, or when there might not be a viable solution at all.

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