While perusing a budget analysis article Marking time while the sun shines, this line caught my eye.
The itch to use tax policy to achieve micro goals, evident in the relief to small cars last time, was evident once again in the cute (and unwise) scheme to curb cement prices through tax rather than competition policy.
My antennae are more tuned to microeconomic policy issues and so I did a rough check and came up with this and this. The natural question that came up was this: what is the issue with prices in the cement industry and why are taxes so high there? Hence I decided to turn to the wisdom of the IEB readers. What do you think is happening here?
PS: Another reader asked for budget commentary on the IEB. In my opinion, some of the best commentary on the budget 2007 is here.