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Whitby Fre Pre, Weelesday, February 9, 1994, Page 7 Afiscal drag Welcome te Uncle BiJl's friendly clasa in Economics 101 here at Noddingoff U. Are we ail comfy? Great. The issue for the day is ... hold it, we have a à uestion from the back row. What's that? What time o w. talc. ouw moke break? That question fits rigt inte our topic. Wbich is: taxes. Last week we talked about supply and demand. Les apply that te taxes. Su ppose we mncrease the tax on, oh, say, cigarettes, soe e coat, what the heck, $48 a carton. Remember our demand-suppl diagram, with the curves going this way and 1-a ie a cross-your-arms bra commercial? With high prices, fewer people are willing te, pay te amoke their brains out. If we want people to, pay that much for something that makes them sick we must control the supply.. What if someone offers an alternative supply. Smuggled across the border on snowmobiles, trailers, boats, cars, pack dogs or cocaine shipments. To seil at $18 or $20 a carton. Mewe have a mid-term test: would people rather pay $48 or $20 a carton for cigarettes? Answer slowly. So tax people lose control of the supply. How do we battle this? If you were apolitician? Yes, y ou at the. back? You'd blame it on the Tories. Right. Which helps for a while. But then? Girl in the Slo-Pitch Night Shirt? Youd start searching the cocaine shipments. Sure. Ha. Ha. Ha. No really. You'd what? Cut the taxes te bring the cost per carton down te $20 legal. That'd do the smugglers out of a job. But wait! Remember our aupply-demand curves? If we lower the price, what mig h ts do te, demand. That's right. More people are likely te buy t.he product. How's the tàxinan te deal wiith that fiscal drae? More peop~le smoke and what happens? More people get sick and die. Ugly business, that. The dying part.is okay -- it's cheap. But that getting sick p art is going te, cost governments more money in health costs. With less money te pay for it. But it says in your text: "To flght a recession, there are two ways open: raising expenditures or cutting taxes.» Slashing cigarette tax recession. Especially taxes collect. is enough te end the they airnt been able te Let's talk about the marketing. We have a product, tobacco, which has saturated the aduit market. No room to expand. In fact, some people are even quitting. So how do we in marketing combat this stupidity? Right! The tobacco industry works to bring the price down. They use strategic market analyses and several snowmiobiles and the governinent lowers taxes. Which in turn lowers prices. Hey, you gays are getting this. Okay, se the cigarette smugglers and tobacco companies were friends,rgh But cut the taxes, they are't rindsan mre.Unes s srnugglers can find new customers .or cigarettes. Thmnk maybe they would trade their snowmobiles for large fur coats with great big aide pockets? Then they could stand out on street corners near schools ... But smugglers have their own marketing experts. Smuçglers -have ail the infrastructure set up for runnmng stuf into this country. Ail they have te do is look for another product. Like liquor. Cocaine. Stuf like that. So there we have it: right out of your marketing and economics texta: the solution to the recession -- taxes on some thingactsi in half creative marketing to increase dematnd5, and infrastructure supports te move te new products, wbich will ini turn create new business. Doctors, hospitals, funeral homes ahl will do a better. There's likely even a govermnent grant to help everybody adapt. rd stay after class and discuss it, I've got te go te Cornwall on a client cail for rny consulting business. rw à.;ilIl M.- % ,w Rw~wrz~IriI.Mmr Or. ANDREW'S PBEMBYTRIAN CHURCU MANSE, C. 1930 This residence for the minister of St. AndreW's Churcb was built at the northeast corner of Gilbert and Centre streets in 1902 and replaced by a new building dloser to the church in 1957. The original manse wus demolished 'n 1977. Whitby Arclvm photo 10 YEARS AGO from the Wednesday, February 8, 1984 edition of the WHITBY FRLEE PRESS " Tii. Dr. J.O. Ruddy General Hospital needs only $40,000 to start its expansion. " Tii. Town of Whitb will seek $20,000 in federal and provincial funds to celebrate Ontario's bicentenniJ this year. " A proposed bylaw will probibit businesses operated from residences in Whiitby. " Neil Wick of Brokln is compiling a histor of the Lynde House, Whitby's oldeet building. 35 YEARS AGO from the Thursday, Fbruary 5, 1959 edition of the WHITB WEEIKLY NEWS " A new animal control bylaw will b. used to keep doge from running at large. Hugh MeMaster is dog control officer. " Whitby Volunteer Fire Department was near the top in a Fire Prevention Week contest held tbroughout Ontario. " Donald Travel Service opened for business at 300 Dundas St. E. " Preparation of architecti' drawings has begun for a new town hall on Dundas Street West. 125 YEARS AGO frorn the Thursday, February 4, 1869 edition of the WERITY CERONICLE " Captain James Rowe, Whitby's first mayor and on. of the leading grain merchants at the harbour, died at Port Whitby on Jan. 28, at the age of 69. " I. Chronicle bas filled eight columne with a report on the proceedings of the Ontario County Council. " James Campbell, of the dry goods firm of R & J Camnpbell, leaves for Europe today to purchase s p ing and summer goods for bis store. " Whitby's Chief Constable, Alexander Cameron, ie paid $10 a month.