New Taxes to Help You Curb Your Sense of Freedom

We’ve written before about how our taxes could be shipped abroad, and also about how a value-added tax could be on the way. Now, we take a look at the new sin taxes cropping up in states all across the nation. It’s one of the older plays in the book. Uncle Sam’s state governments can once again fly under the sensible cover of morality in order to tighten the screws on your income.   

According to The New York Times:

“Texas, Georgia and Pennsylvania have considered “pole taxes” — for buyers of pornography and patrons of strip clubs and escort services. Seven states last year either enacted new taxes on alcohol or raised old ones, according to the Center on Budget and Policy Priorities.

“Since January 2009, 22 states have increased their tobacco taxes, and now South Carolina, which has held its cigarette tax at 7 cents a pack for more than three decades, may follow. In Nevada, the State Senate has discussed expanding, and taxing, legalized prostitution. Proposals for soda and candy taxes are also percolating in places like New York, Colorado and Washington State.

“In California, advocates of marijuana legalization are pointing to the tax revenue that will be generated. And 25 states have expanded or considered expanding their sanctioned gambling operations […] Cloaking taxes in moral terms is not new. Advocates for ending Prohibition during the depths of the Great Depression argued that the “noble experiment” hadn’t reduced drinking, while desperate social conditions had grown worse. Prohibition, they argued, encouraged cooperation with organized crime and contempt for the law. But many historians have documented another reason for the end of Prohibition: the need to create new jobs and additional sales taxes.”

The new sin taxes reek of ulterior motive. Sure, we’d like to see a better society form, but probably not at the cost of higher taxes. Sweden, for example, with its government monopoly on high-priced liquor may have a longer-living average citizen. Still, whether those years are as interesting, or as worthwhile, is much less certain.

You can read more of the details in New York Times coverage of how cash-strapped states are looking to lucrative sin taxes to bump up revenue.


Rocky Vega,
The Daily Reckoning