Now THAT’s a Tax Loophole!
The problem with simple taxation systems is that they are unfair, taking too much tax from some people and not enough from others. So we add some subsidies and exceptions, and end up with a complex tax system. The problem with complex tax systems is that with so many subsidies and exceptions there are more opportunities to avoid taxes, even on the things that are most deserving of taxation. So we always need even more exceptions to correct this.
John Kay highlights a proposal in the UK to make sure that taxes are applied correctly based on whether food is served hot or cold. Hopefully that will reduce the incidences of Cornish-pasty-based tax avoidance . Just be thankful that doing your taxes doesn’t involve an instant-read thermometer… yet!