So here’s my gripe of the day. Maybe you’ve read David Leonhardt’s article in the New York Times entitled Let’s Raise a Glass to Fairness. Essentially, Leonhardt argues here that taxes on beer and wine haven’t been raised in a long, long time and that inflation has pretty much reduced them unfairly since. That really, in order to be fair, we should be looking at increasing them, because alcohol has social consequences, and the “sin” tax is the best way to recompense society.
Obviously, I’m biased. But I say to Mr. Leonhardt, unequivocally and without reservation: Hogwash. Why?
There are two basic problems I have with “sin” taxes. First, who defines what the sin actually is? And second, it’s always easier to get the other guy to pay more taxes. “Hey, I don’t smoke, let’s raise the cigarette tax!” or “Hey, I don’t drink, let’s raise the booze tax!” are all too common refrains.
Leonhardt touches on drunk driving as the biggest social cost, and admittedly it’s a problem. But raising the alcohol tax is not going to solve it, by any stretch of the imagination. And the suggestion opens the door to a floodgate of comparisons. Distracted driving these days, usually while yakking or texting on the cell phone, is a growing cause of accidents. Do we now add a social engineering tax on cell phones too? And how about the automobile? It’s a common denominator in both problems. Better slap a sin tax on it.
And while we’re discussing public health issues, how about those sugary soda pops and artery clogging fast food meals that contribute to the epidemic of heart disease and diabetes in America? Tax ‘em, I say!
Of course, I’m not really advocating new taxes on any of these. I’m simply making a point, that the sin is in the eye of the beholder, and raising taxes to dictate to society what it should and should not be doing is not only ineffective, it’s disingenuous. Because the real goal of sin taxes is not to alter behavior or solve social problems. It’s to raise revenue while making the other guy pay for it.