Posts tagged with: sin taxes

Blog author: jcouretas
Monday, September 28, 2009
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From a report in today’s Washington Times:

… brace yourselves for a deluge of nuisance taxes, sin taxes and “fees,” limited only by the imagination of revenue-starved governors, mayors and legislators. Raising fees and nuisance taxes amounts to nothing more than “tax adventurism,” said Jonathan Williams of the American Legislative Exchange Council, a nonpartisan organization of state legislators. Governors and legislators “often raise taxes and increase fees during tough budget times before resorting to hiking broad-based income and sales taxes,” said Mr. Williams, who co-authored the recent book, “Rich States, Poor States.”

Among the nuisances: car-rental taxes and hotel taxes, the “Amazon” tax on Internet purchases, cameras catching speeders and people running red lights, bridge and toll taxes, increased fees for marriage licenses and dog tags, etc.

The report noted that “although cigarette taxes were raised 57 times between 2003 and 2007, the tax increases met revenue projections only 16 times … ”

Says Muhtar Kent, chief executive officer of Coca-Cola Co., about calls to impose soda and fat taxes: “I have never seen it work where a government tells people what to eat and what to drink. If it worked, the Soviet Union would still be around.”

Blog author: jballor
Monday, September 17, 2007
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Here’s a justly famous quote from C. S. Lewis on why the danger posed by a nanny government can be much more oppressive than that posed by the consolidation of economic power:

Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

That’s taken from his essay, “The Humanitarian Theory of Punishment,” and it speaks well to the difference between political and economic power. While Lewis is writing within the context of government power in the administration of criminal justice, just think about how perceptive Lewis’ observation is when applied to the ever-expanding reach government regulation via so-called “sin” taxes.

Progressives are right to be concerned about the conflation of those two sorts of power, but I think they are wrong to be reflexively more suspicious of economic power than political power.

A paper recently published at the National Bureau of Economic Research calls into question some conventional economic wisdom about the effects of certain kinds of legislation. In “The Church vs the Mall: What Happens When Religion Faces Increased Secular Competition?”, Jonathan Gruber and Daniel M. Hungerman find that when so-called “blue laws” are repealed in any given state, “religious attendance falls, and that church donations and spending fall as well.”

But in addition, “repealing blue laws leads to an increase in drinking and drug use, and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and non religious individuals falls by about half after the laws are repealed.” For more information on the study, check out this article from the CS Monitor, “Maybe ‘blue laws’ weren’t so bad” (HT: Zondervan>To The Point).

Richard Morin wrote an op-ed in the WaPo last week (HT: Religion Clause) about this paper, and wonders “why would the elimination of blue laws suddenly provoke such an outburst of sinning among the religious? After all, there are six other days of the week to shop (or drink) until you drop. And it’s not legal to buy cocaine or marijuana on any day of the week.”

Before I paint the broad outlines of an answer, let me point out the potential significance of Gruber and Hungerman’s conclusions. It has long been assumed that laws prohibiting or restricting the sale of certain controversial items (i.e. alcohol, tobacco, drugs) has a net negative effect. Mark Thornton over at Mises.org published a piece that claims, for example, that “prohibitions have no socially desirable effect.”

Acton’s own Rev. Robert A. Sirico, in an essay on the “sin tax,” wrote that sin taxes, prohibition, and presumably blue laws are each “a different point on the same continuum.” Sirico goes on to cite Paulist priest James Gillis, who said that prohibition of alcohol “was the greatest blow ever given to the temperance movement.”

Gillis writes,

Before prohibition, the people at large were becoming more and more sober. Total abstinence had become the practice, not of a few, but of millions… Under the Volstead Law, drinking became a popular sport. The passage of the law was a psychological blunder, and a moral calamity… The only way to make the country sober is to persuade individual citizens, one by one, to be sober.

It seems, however, according to the NBER paper, that blue laws do have the opposite effect, and in this way can perhaps be distinguished from prohibition. Is there a theological explanation for this? (more…)