by Outcast_Searcher » Tue 20 Sep 2016, 16:03:08
$this->bbcode_second_pass_quote('GHung', '')$this->bbcode_second_pass_quote('', 'W')ould you stop throwing things away and get them repaired instead, if it were cheaper to do so?
The Swedish government likes to think its citizens would, and is putting the idea into practice.
The country's Budget for 2017 will cut the VAT rate charged on minor repairs to things like bicycles, shoes and clothes.
Tax refunds will be offered to people who get their white goods repaired, like washing machines and dishwashers.
The VAT rate will be cut from 25% to 12%, and the tax refund will let people reclaim half the labour cost of a repair to white goods and kitchen stoves.
Although they likely mean well, I don't think this is enough. To me this is an example of impractical government not living in the real world. A big tax credit, say 80% for the entire cost of the repair (labor AND parts) would be more like it, IMO.
A simple example: Swedish income tax rates are high, so lets use 50% as a round-number average.
So for me (a bargain shopper), a brand new washer or dryer, with delivery, installation, and the extra things like new hoses or vents generally required would cost me roughly $400 -- from a major supplier. Being single, that might well run just fine (say, two loads a week on average) for a couple of decades. (My last set went 25ish years).
So for me if the beast is fairly new (say less than 5 years), I'll likely give a service call a try. But if it's fairly old (say 15 years or more) and already has a variety of minor problems/noises (which in my experience, just like cars, such machines accumulate over time) -- it's a financially unwise move to call the repair outfit, $40 tax refund or not. I'm willing to bet, round numbers, my math will apply to a large percentage of consumers.
Now, to repair one of those I have to pay for the parts and the labor. For anything significant, something like $200. So for an hour of labor (minimum for most such service calls), let's call it $80 of the bill. So the tax deduction yields 50% of that, or $40, or a fifth of the repair and a tenth of the cost of a new one. And let's remember -- for 90+% of folks, they don't know what's wrong, only that it won't work. So they can't make an intelligent assessment of what the labor bill will be until they get an estimate (which is an hour service call fee, at best).
It's just not enough of an incentive, if you expect people to get old things repaired for financial reasons.
They might do better by charging a fairly significant fee to dispose of the white goods (helping reflect the burden on the planet). They might do better by appealing to peoples' sense of "duty" and trying to instill some helpful sense (patriotic, earth-friendly, etc) into the population via a P.R. campaign.
Or, if this is important, they need to make the credit large enough to be a real incentive to keep the old machine.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.