04/22/10 Stockholm, Sweden – 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.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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Now that’s just ridiculous.
I don’t like taxes, and I am no fan of government, but I think that this qualifies as an abuse of the word “freedom”.
Am I more free when I cannot buy Marijuana in California at all, or when I can but have to pay a hefty tax on it?
The government tries to curtail “undesired” behaviors all the time. I’d rather have them do it with a tax than with an outright ban! It’s at least a win-win. Either I am willing to pay the piper and the state gets extra revenue, or I “evade” the tax by avoiding the behavior.
It’s the same way that there are some good environmental regulations that get marred with the word “freedom”, as if I should be free to get cancer from poisoned groundwater.
Let’s protect ourselves from real incursions on our freedom by not crying wolf!
Erik,
You missed the point. Its not as much about freedom as is it about taxation. These underhanded taxes are nothing more than another way to collect money in an already broken systems that needs to stop collecting more money and instead figure out how to do things with less like the average everyday person does.
Julio,
I agree. Our government needs a lot of fixing (and reduction) to lower its expenditure so that fewer taxes are required.
But you nailed it. This is a question of government reform and taxation policy. My complaint was dragging the concept of freedom into the debate.
These topics represent a conversation about strategic priorities that our country needs to have.
The government does a lot of things now that are of minimal value and/or benefit very few people. These need to go.
Until that happens (and it should happen ASAP), do we increase revenue or increase our deficits? I don’t like either idea. But in the interim before we get real change to expenditures, I think sin taxes are a preferable form of taxation to many other forms, because it becomes a matter of personal choice to engage int he activity and pay the tax or not.
The reason I read this site is because it represents adult, nuanced, and analytical debate that we don’t see in most of the media. We talk seriously about serious problems. Confusing the discussion by wrapping things in the concept of freedom is one of the flashy and juvenile conceits that I would expect to see elsewhere.
From a “freedom” perspective, Wall Street should be free to do whatever it wants, and if anyone wants to be a part of any deal, let them. However, those deals are not just between the two parties involved. As we have seen, there are many externalities that impact us all. Therefore, wrapping it in the issue of “freedom” is a red herring that distracts us from what we really need to think about as a society.
errmm … point out exactly where the reference to “freedom” is, in the article?
You, Erik, were the one whop introduced the term here. Were you just being nuanced?
It’s in the title.
It’s also an implied judgement in the last sentence of the article. It bookends it, as it were.
I am generally a big fan of Rocky Vega, especially his recent posts on Angel investors. That is why I went out on a limb to criticize this post’s cheap Fox N ews-ish headline.