Acton Institute Powerblog

The self-defeating nature of sin taxes

Rev. Ben Johnson, senior editor at the Acton Institute, writes at CapX that bishops should refrain from encouraging sin taxes.

Recently in Poland, a letter written by bishop Tadeusz Bronakowski was read aloud in many Catholic churches, stating that the “state has a ‘responsibility’ to pass laws limiting alcohol’s ‘physical and economic availability,’ and to back them up with ‘ruthless enforcement.'” Johnson, however, asks bishops to take a look at historical records regarding sin taxes and reconsider their stance, because past and present sin taxes have resulted in a burgeoning black market.

His examples range from Prohibition to last week’s vote by the New York City Council to raise the price of cigarettes to $13 a pack. “Research found that roughly half of all cigarettes, and one-quarter of all alcohol, consumed in New York City is bought on the black market,” he wrote. Further, the illegal trade has financed terrorists, including al-Qaeda.

Johnson cited an alarming statistic regarding the sin tax on tobacco:

According to the Centre for the Analysis of Terrorism in France, 15 international terrorist organisations, including the IRA and FARC, benefit from illegal cigarettes: the smuggling accounts for 20 per cent of those groups’ revenues. Pakistani militants made more money from the illegal tobacco trade than any other source besides heroin.

Sin taxes are self-defeating. “It is imperative that the  coalition of bootleggers and Baptists of old doesn’t give way to the less likely, more dangerous pairing of bishops and bombers today.” 

Johnson’s article can be read here.

(Photo: Public Domain (CC0 1.0)) 

Caroline Roberts

Caroline Roberts is a managing editor at the Acton Institute and produces Acton's weekly podcast, Acton Line.