China taxes chopsticks

Ramit Sethi · March 23rd, 2006


The Chinese government announced plans on Wednesday to increase existing taxes and impose new ones on April 1 for everything from gas-guzzling vehicles to chopsticks in a move to rein in rising use of energy and timber and the widening gap between rich and poor.

New or higher taxes will fall on vehicles with engines larger than two liters, disposable wooden chopsticks, planks for wood floors, luxury watches, golf clubs, golf balls and certain oil products.

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The finance ministry is imposing a 5 percent tax on chopsticks and floor planks, citing a need to conserve timber.

Ok, a couple of things. First of all, how the hell do you use chopsticks? I’ve tried for years to learn how and I think I am just a moron.

Second, compare the behavior of the Chinese government with the US, where personal consumption makes up 70% of GDP (in China, it’s 42%).

So governments restrict spending on items, but what about regular people? What if you put a tax on your own luxury spending? Something like “for every $1 I spend on shoes, I’m going to add $1 to my savings account.” Is that too weird?

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  1. isn’t that the same premise as that new citibank visa i keep seeing commercials for?

  2. Anonymous

    BofA’s keep the change program may be what you’re referring to. It’s a great deal up to 3 months or $250, whichever comes first.

  3. Ramit Sethi

    I wrote about the BofA program here.

  4. Anonymous

    Huh. In the US this would be considered a flat tax, not a progressive one because, here, net worth or income isn’t always related to what you buy. I imagine that the conditions in China are very bad if the savings rate is that high and the gov’t feels that this will lessen the rich/poor gap.

    “The big question for automakers is how much of the tax to pass on to consumers, since the tax is collected from the manufacturers.”

  5. Scott Young

    Using chopsticks isn’t that hard it just takes practice. I never used to be able to use chopsticks and now it just feels inauthentic if I have to eat Chinese food without them. There actually pretty similar to tongs, just that you have to use one of your fingers for a fulcrum instead of a metal joint.

  6. candice

    This was how I learned originally, from the waitresses at the sushi bar we went to all the time when I was in elementary school:

    Use the chopstick wrapper as the piece of paper between rubber bands. You get used to handling them better when they are stuck together, and eventually start using them without the rubber bands.

  7. Aaron W. Thorne

    I like the idea of your own luxury tax. It would take some work, as you would have to determine what would be taxed, and at what level. The only problem with this is that the people inclined to go through the work of setting up such a system, and then actually following it, are probably smart enough with their money that they don’t need to do it.

  8. The most intellectually dishonest form of taxation is the taxation of goods with very little elasticity of demand.
    Governments know it’s very difficult for people to reduce their driving, smoking and drinking, so they raise taxes on those items allegedly in order to curb their consumption, but really they’re just getting more and more money.

  9. chinese

    i like using chopsticks

  10. Not quite the same, but your idea reminds me of ‘cuss jars’.

    Example: I once talked to a girl who liked to go out to nice meals but had trouble saving cash. And he cussed like crazy.

    (I lived in the South, where `cuss` means say a bad word).

    So, she and her roommates set up a cuss-jar. Every time she cussed, she had to put a dollar in the jar.

    She dropped paper like crazy.And once a month, they’d all go out to a really nice lunch with the money, and drop the rest in savings.

    There’s plenty of more rational ways to save money, but for lots of people little rules and games make it easier. Whatever works, right?

    A few of my friend’s families had cuss-jars in their house.

    Watching big angry dudes try not to cuss about having to drop another dollar in the jar = quality old-timey entertainment.

  11. Helium Gas

    Does the chopstick thing extend to Hong Kong? I just arrived back and everyone was using metal chopsticks… Bizarre