Liberty Expose: The Sin Tax Racket

It is an experience, common throughout all consumers: standing in line at a store, and looking upon the price of tobacco products in repulsion – and watching as people willfully pay those taxes. We all know it’s a racket – the government taxes products that most people try to avoid. There is a sin tax for just about anything and everything. Arkansas has a tattoo tax, Utah has a “sex” tax, Maryland has a “flush” tax (yes, that kind of flush), and New York has a tax on bagels. (What tyranny is this?) Tobacco is the most persecuted of the lot, but alcohol and gambling are also represented in the sin tax racket.

The logic behind sin taxes are straightforward; an additional tax on products that are averse to the consumer and to society will discourage potential consumers to purchase such items. In addition, the revenue retrieved from sin taxes will be utilized for public programs – at least in theory. Theory is the keyword here; the effects in curbing behavior via sin taxes are dubious. There have been studies suggesting consumption has been curved, but only to a degree. But it does not take a philosopher to see thought the exterior to the truth; sin taxes aren’t about perfecting the human condition, though undoubtedly, more orthodox progressives believe it is possible.

Sin taxes are about targeting a group of people (especially tobacco users) that participates in activities that most of, much of society does not participate in, with the end being the raising of revenue. It is economic discrimination with a smile; it’s okaying the tax gambling, and products such as alcohol, soda, and especially cigarettes, advertised as leading lost souls to the light.

There are two main arguments against sin taxes: first, they are ineffective and counterproductive. Second, the philosophic argument of whether the government should pursue such policies.

Let us analyze the first argument. The arguments that sin taxes curb adverse consumer behavior is dubious at best; considering the expended nature of sin taxes, not all products hold that same power over consumers. The Atlantic published an article that supported the idea that taxes can be used to discourage soda consumption. It will be easier for one to curb soda consumption to save money, but relinquishing tobacco’s grip on tobacco users is a much more difficult task. The true effectiveness of sin taxes rest on the revenue collected for the state governments implanting the taxes.

Sin taxes accounted for 15.9 percent of revenue in Rhode Island, 14.8 percent in Nevada, 11.5 percent in West Virginia, 9.9 percent in New Hampshire, and 9.4 percent in Delaware. Cigarettes are taxed oppressively. New York, the state with the highest tax on cigarettes, forces a $4.35 tax per-pack. The states with the next highest taxes on cigarettes, Rhode Island, Connecticut, Hawaii, and Washington tax at $3.50, $3.40, $3.20, and $3.25 per pack respectively.

But actions have consequences, and it should be of no surprise to anyone that cigarette smuggling or “cigarette piracy” has become a major problem. Shocker of shocks, New York has the worst smuggling problems, where 59.6 percent of cigarettes are smuggled in. In New York, economically disadvantaged neighborhoods such as the Bronx see high rates of illicit cigarettes, with 57.9 percent of cigarettes are untaxed (read: obtained illegally.)

When the law is broken, it must be enforced for it to have and legitimacy. A law without enforcement is a mere suggestion. This means more interactions between law enforcement and the community, and thus a more possibility for human error to occur. Recall the incident involving Eric Garner, who died from a heart attack triggered when he resisted police in the New York borough of Staten Island.

Though cloaked as a racial issue, the incident began because Garner was suspected of selling untaxed loose cigarettes, or “loosies” as they are commonly referred to. In an environment in which legal products become too expensive because of excessive taxation, the black market begins to thrive – and a burden is placed upon law enforcement, taking resources away from other matters. Of course, the smuggling results in the loss of revenue. It was reported that New York lost potential revenue on products with sin taxes.

The second argument rests on the idea that the government oversteps its authority with the implementation of sin taxes. There is something, for lack of a better term, creepy about the government using economic penalty to modify behavior. America has had a history with utilizing social engineering to modify the human condition. This was born out of the theological-progressivism of the early 20th century, which pushed ideas that lead to policies such as the prohibition of alcohol.

Freedom to choose goes out the window in a nanny state. The fallacy eventually collapses on itself; if the government has a role in modifying habits through economic punishment, to what end does this act serve, and when does is the line crossed – if there is a line? Sugar is undoubtedly a health concern in the United States, and many want to see sugary products taxed. For that matter, if food that contributes to failing health is to be punished, then why not tax virtually any food product that is not natural.

Virtually every aspect of American life can be subject to regulation and taxation. Virginia has already proposed a sin tax on driving, with people being taxed for every mile they drive due to the affect their vehicle has on the climate. This is a preposterous overreach of authority, and once again the poor will suffer because of the social engineering elite. While economically prosperous people can afford to pay the extra tax, those whom must watch their spending will not be able to afford the products they enjoy

There is an unusual paradox in sin taxes; they exist to deter consumers from using said commodities, but the rationale for keeping sin taxes predicate on the importance of the revenue made – as if those who impose sin taxes know it will not deter consumers from participating in harmful activities. Sin taxes are a racket; the economic advantages of sin taxes are dubious, the ability of the taxes to modify behavior are debatable, and the overreach in power is downright freighting.

Sin taxes personify government overreach to the core; it targets a minority of people under the auspices of saving them. It claims sin taxes fund valuable government programs, when the revenue might very well be used to combat the crime from such taxes. Sin taxes are, to paraphrase the President, “sad!”

 

 

 

 

 

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