member Charlie Hall
made a side comment in the discussion on the previous post
that brought to mind an interesting topic: "Sin" taxes. Sin taxes
, briefly, are taxes that are placed on so-called "sinful" acquisitions, such as alcohol or tobacco. According to Wikipedia, they are most often used in cities to raise money for large projects, such as a football stadium.
I think sin taxes are wonderful, and should be utilized more often, albeit carefully. Large sin taxes cause black markets to pop up, much like large income taxes do. When Russia had an extremely large income tax rate, black markets flourished; when it lowered the rate by a large chunk, suddenly more businesses were reporting more of their activities.
But sin taxes are a bit of the best of all worlds: They encourage people to not waste money on goods or activities that are unhealthy for them and for others, and they discourage people from getting involved in those activities in the first place, which may help curb future addicts. However, they still leave people with the choice and ability to buy the goods they wish to if they so choose, retaining the rights of the individual.
I view it as a slight variation on the way the government treats hybrid cars. [For the sake of argument, I am assuming that people view smoking and drinking as unhealthier and more dangerous than using a regular car (as opposed to a hybrid vehicle).]
In the case of hybrid cars, the government offers a tax incentive for people to buy a hybrid car over a regular car, by allowing a small tax deduction for those who own a hybrid car. It would be unfair to "punish" everyone who owns a regular car by raising taxes on gasoline or on regular cars, especially gasoline: It is not the "fault" of car owners that almost all cars are made to run on gasoline, that hybrids are so expensive, that alternative transportation is not nearly as convenient, that this has been the standard since cars were invented, etc. Even if one would argue that people could 'do more', and it is nowhere near ideal, I doubt many would feel that people should be forced to pay an extra tax for using gasoline.
However, it does
make sense for the government to offer incentives to those who are willing to sacrifice somewhat for a hybrid car. Hybrid cars are still far more expensive than regular cars, with similar models costing between $7,000 and $10,000 more than their non-ecological twins. They also haven't completely cut out the need for gasoline. A relative who worked in the Department of Defense who is quite
the conservative (here's a blow to stereotypes) was considering getting a hybrid car last year; after figuring out all the extra costs versus the gas savings and tax incentives, the difference was still so high he simply could not do it. While the tax incentives in this case are not enough to completely make up for the difference (and larger incentives would likely prove to be too costly to the government), at least the small incentives encourage more people to consider hybrids and likely help a few make that leap.
Along the same vein, the government should consider more - but slight - "sin" taxes. I must emphasize that these taxes should be used very carefully...
But they should be used. The amount of money people waste and the negative effect smoking and drinking have on the general public (drunk drivers, SIDS, lung cancer, etc.) is astounding. Taxes will force people to think a bit more carefully about what they are doing to themselves and their families. Were marijuana to become legal, that may also be a good candidate for a sin tax; perhaps a compromise could be reached to make it legal (something I have no opinion on) as long as there were a large tax on it to help discourage casual use. Gambling could be another target, though the nature of gambling might preclude the tax having much of an effect. Most of all, the savings to the people who decide not
to smoke or drink would be a tremendous step in helping many families get out of poverty, and could provide even further savings to the government in terms of health care and the like.
The difference between hybrids and cigarettes is obvious. In the case of hybrid cars, the government needs to try and help convince people to drive hybrids over the current status quo of gas guzzlers via incentives. In the case of cigarettes, the government should no longer have to "convince" people to stop smoking. Those who are choosing to smoke are doing so despite knowledge of the health risks involved. Instead, the government should help create a dis
incentive to smoke - by hitting people where it counts, in the wallet. Those who still wish to do so may - but they are going to pay for it now
, not just later.
The government should not be in the habit of 'forcing' people to get healthier or take on certain lifestyles; but they should be in the habit of helping to encourage those lifestyles which help everyone and discouraging those which do not. There is definitely precedent for this, such as tax breaks for married couples, and the incentives already in place for homeowners and hybrid buyers, and this is a practice the government should continue to expand.