The other day we were told, by one whose buisness it is to predict these things, that no matter who wins the upcoming presidential election, our taxes are going up. He may be right. If they're serious about stimulating the American economy, raising American taxes seems a foolish approach, but the public keeps demanding more services, and there's always a bill for services rendered.
So I got to thinking, at lunchtime, as I munched on my barbecue potato chips, about Switzerland. They have some wonderful potato chips there, somewhat like our barbecue variety, but better—though that impression may have been due to Favorable Emotional Circumstances. One day I made a hasty stop at the grocery store and grabbed some food for a train trip, only to discover, too late, that I had paid over $5 for a medium-sized bag of chips!
The bag I was munching from was more than half again as large, and priced at $2.50. I actually paid half that; I generally don't by chips unless they're on sale. It occured to me that a price tag of $7.50 would be a significant deterrent; I would probably still buy them for very special occasions, but casual purchasing would defintely be out. Thus it would be in my best interest, health-wise, if the potato chip manufacturers decided to triple their prices. But they wouldn't do it. Without illegal collusion in the industry, competition would force the price back down immediately.
Unless the government stepped in. Imagine a $5/bag tax on potato chips; applied to all, no one manufacturer could undercut the market, and suddenly Americans just might start reducing their consumption. I only pick on potato chips because they are my own weakness, but let's not stop there: corn chips, soda, candy, cookies, Happy Meals—all those top of the food pyramid, artificial ingredient, and preservative heavy "foods" that make up so much of our modern diet and have nutritionists and health professionals wringing their hands.
Sin taxes have their problems, I know. The last thing I want to do is create yet another opportunity for organized crime to fluorish. (Pssst! Wanna buy an Oreo?) But it would be my favorite kind of tax: likely to provide significant income for the government, yet completely avoidable simply by eating as we know we should.I picked up a book at the library the other day which seemed to do a reasonable objective view of the history of smoking, mostly from an economic view, though contained other viewpoints as well.
They had a number of quotes from various pro and anti-smoking sources.
The one quote that I thought was the best was something like this:
An economic conspiracy theorist might say that smoking is actually a good thing - keeps people happy in lousy jobs and kills them off as they retire to keep them out of the health care system.
It also mentioned that in the UK, 70% of the cost of a cigarette is in taxes, where in the US it is more like 25% or so. (note the retail prices are (as of a couple years ago or so) the same in the US and the UK. The manufacturers are currently taking up the difference in tax "breaks" that US smokers are getting)
I think they said the US government gets 11 billion dollars in tobacco taxes each year, but only spends a fraction of that (15 million?) on smoking education. So, it isn't really in the government's best interest to have people stop smoking.
There was a quote from a smoking lobbyist who said that it was too bad the government continued to tax the poorest folks more than their share.
Regressive or no, I still like taxes that any reasonable person can avoid. You could consider stopping smoking, or giving up junk food, to be the poor man's tax loophole. :)
The problem I have with the junk food tax is, who decides what is junk food? Will they tax butter? What about peanut butter, nuts or carbohydrates? We can't seem to agree on what's healthy.
If you wanted to tax bad for you stuff, how about prescription drugs?
"Health food" may be a little like pornography: trying to define it is nearly impossible. But as the one justice said, "I know it when I see it." Maybe we could just tax the egregious offenders and not get all tied up in definitions. Not that that worked for pornography.
Prescription drug companies have too much money and people are dependent on them in our society. I think the government even subsidizes them.
Come to think of it, the government already subsidizes some junk food, like things that use refined sugar...
As you may know, that "wanna buy an Oreo?" scenario is already happening at many public schools. Kids who dare to risk suspension can make a quick fortune selling banned sweets to their classmates.
I definitely agree that drugs of many sorts are 'way over-prescribed and overused, but I will say a couple of things in defense of the companies and of subsidies. One reason prescription drugs are so expensive (besides the usual consequence of our lawsuit-happy society) is that only a small fraction of the money spent on research and development nets success, and even then the companies are only allowed a few years of exclusive rights to their discovery -- a good thing, but it necessitates making a higher profit at the beginning. Also, some important drugs would not be developed nor manufactured at all without subsidy, whether by government, charitable foundation, or the drug companies themselves, because there is not enough demand for them, however important they may be to a small subset of the population. It's all well and good to expect pharmaceutical companies to be charitable, but if they go bankrupt it helps no one.
No, I didn't know there was a black market for sweets in the public schools. That's quite a switch. It wasn't that long ago when Heather and Janet's elementary school had ads for M&Ms in the halls (sponsored notice boards), the high school had soda machines all over (profits went to the athletic department), and the band students made much money selling candy to the classmates. And not only the band -- candy sales were so popular that the rights were portioned out amongst the various student organizations; the band had their turn only twice a year, but candy sales went on forever.
Getting back on topic, your proposal does have some merit IMO. What I was trying to get at is, a downside to your proposal is that in general, at some point, what 'sin' is varies greatly depending on who you ask and letting politicians decide what sin is is a *bad* idea.
Lets assume we're talking about the federal government for a second here to simplify things. My solution to this is that I would propose that the feds only be constitutionally allowed an excise tax on substances proven to act as neurotransmitters in the brain (i.e. drugs). I would be open to other inclusions too like 'proven to significantly increase risk of heart disease or cancer' but considering how often that definition tends to change, I think it's poorer than my suggestion. The most important thing is to *not* constitutionally allow things like an excise taz on anything politicians would like or income IMO. This results in them having the right to reach all up in your butt and totally harass you. They will define 'sale' or 'income' as broadly as possible and make it completely impossible to not break the law, strictly speaking.
Now my suggestion assumes more of a legalization of drugs than current;y exists. Maybe you aren't comfortable with that. 1) it would give better justification for many current taxes like cigarrete and alcohol taxes. 2) Personally I think pot will be legalized and taxed within 10-20 years.
The common reason stated for ending alcohol prohibtion was that people were tired of gangs. Fair enough. There are certainly parallels to our current drug war and it's certainly possible that the public might catch on eventually. But IMO, the real reason it happened was that there wasn't enough income during the depression to make the feds happy with their revenue. So IMO, FDR decided to legalize and tax alcohol as an additional tax stream. I think we may see a similar thing happen with pot in the near future when we can't afford our social programs and desperately need additional revenue.
You may be right for other reasons, too. I was talking to a former state prosecutor who is all for legalizing drugs because of the enormous strain that they are putting on our legal system. I'm not convinced it's a good idea, but I see his point.
Just to make it clear: I don't approve of new taxes and tax increases. Yes, taxes are legitimate and important -- I always defended them by remarking, "Someone has to pay for the snowplows." Can tell I lived in a colder climate then? You can substitute national defense, or meat inspectors, or whatever you think is a legitimate function of government.
There's the rub -- legitimate function of government. We must work nearly a quarter of the year to fund our governmental programs (see Tax Freedom Day) -- God Himself only asked Israel for a tithe. (Note that I'm being a bit hyperbolic here: the "tithe" is a complicated issue. It was not strictly 10%; there were other "fees" as well; it covered a significant contribution to charity as well as supporting all levels of government; and it was also responsible for funding a large party for the taxpayers themselves.) Thus I'm quite certain we do not need more taxes; we need less waste and less governmental intrusion into places it does not belong.
However, if we must have a tax increase, I say let it be in an area that's avoidable by those willing to make a small sacrifice. :)
I was talking about replacing the federal income tax and FIC tax with your sin tax idea modified for drugs. And if the feds lose revenue, too bad. Cut some spending.
To summarize, I think the fed should generally only get to tax
Drugs, Alcohol, Tobacco, Gasoline, Imports, public spectrum fees and public corporate income.
There really ought to be enough there to run the stuff the feds are constitutionally authorized to do, yes?
Give em an inch and they'll take a mile:
http://blogs.telegraph.co.uk/foreign/brunowaterfield/april/passivedrinkingguilt.htm
I also find it important to note how the WHO and UN drive advocacy and propoganda for this alcohol neoprohibitionist ridiculousness despite alcohol's proven cardiac health benefits. Makes you wonder what kind of health benefits other drugs like marijuana etc. might have that we don't get told or know about.
- What are "public spectrum fees?"
- What is "public corporate income?"
- What are the feds constitutionally authorized to do?
Public spectrum fees are charges for the access rights to a certain part of the public airwaves. Television stations, radio stations, and cell phone companies all use them. I'm fine with the feds auctioning off the rights which they already do to some extent.
By public corporate income tax I simply mean a tax on the income of public corporations.
To my mind, the feds ought to be constitutionally authorized to deal with things like defense, environmental protection, interstate highways, public airwaves, coining money and equal protection. I don't think the feds should be running social welfare programs, farm subsidies, corporate subsidies, or social security / medicare the way they do. Social welfare is best left to states or to the peopls as the tenth amendment would suggest.
