Monday, August 13, 2007

Unintended Consequences Can Be Good...

Here is an article from the Arizona Republic about smoking and taxes on cigarettes. Basically, it is well known that as cigarette taxes increase smoking decreases, but counterfeiting and tax evasion also increase. I think cigarette taxes make sense when they are used primarily to address the public health issues related to smoking. I don't think that taxes on 'vice' should be used be used as an ATM for spineless politicians. Furthermore, lumping alcohol in with smoking just annoys me.

Am I a hypocrite because I don't smoke and like the occasional pint? Perhaps... The difference I see is that alcohol can have positive affects on health when consumed in moderation, smoking on the other hand is always bad. However, there is also a link between mental illness and smoking that is emerging. Is it fair to tax a defacto treatment (albeit self prescribed) for depression?

I think we have to be careful from a public policy standpoint about trying to get too much revenue from sources like cigarettes...

4 comments:

Unknown said...

Aren't terms like "good" and "bad" moral judgments? Who is to say that my occasional cigarette is "bad" while your occasional pint is "good?"

It seems to me that you are well qualified to make that decision for you. I'd only ask that you let me make that decision for me. Fair enough? :-)

All sin taxes are the same. It's force fed morality. I may think it's "good" that less people smoke when the government taxes cigarettes, I think smoking is a bad habit, but it's always bad when government makes moral decisions for me... or for you.

A DemLament said...

I can see where you are going, but I have to say the cigarettes being bad for you is not a moral judgment, it is a fact, same with moderate alcohol consumption. However, with everything there are degrees.

I do think it makes sense to tax certain things to help offset the costs incurred by society in their use. Cigarette taxes should be used to reimburse programs like Medicare for smoking related illnesses or for subsidizing healthcare for people exposed to smoking (bar tenders etc.) Similarly, I think a carbon tax on fossil fuels makes sense…

My view point is purely driven by trying to spread costs of such activities evenly… If you smoke you should help offset those costs. If you drive a hummer, perhaps there should be an additional fee that goes toward development of alternative energy or for providing a subsidy to buy a hybrid.

The idea I am pushing here is that activities where there is a public cost should not be prohibited, but cost should be spread more evenly.

Having said all of that, I am very uncomfortable with Government making moral judgments… While the impetus of many of these taxes was moral, I do not see them having to be necessarily moral, but could be more rationally based on costs.

Unknown said...

So, do I get a tax credit for having a glass of red wine at night? ;-)

A DemLament said...

That is not a bad idea... Promote the good and discourge the bad. That would make for intersting regulation. We could have the Department of Alcohol Moderation and they could come sit with you every night to make sure you drink just one ;)