Sin Taxes

We tax all the others and pass the revenue on to you

Sin taxes are taxes on popular activities that are thought to be socially undesirable but too much in demand to prohibit.  Tobacco and alcohol are examples.  

What's the point of sin taxes?  Revenue, sure, but what about behavior modification?  The 18th Amendment raised behavior modification to a Constitutional level; no manufacture, sale, transportation, import or export of alcohol.  How did that work out?  What some deem undesirable behavior is completely normal to others, not requiring modification.  Heavy taxation replaced legislated temperance.

One of the problems with sin tax revenue streams is that they can dry up.   Gambling and alcohol taxes in a down economy, for instance.  Problem is, gummint budgets count on them not to dry up and plan their expenditures accordingly.

Here's an example:  Washington, DC, imposed a tax on disposable paper or plastic grocery bags, a nickel per.  It's popular to sell new taxes with the idea that the revenue will go to a needy cause and in this case it's the "newly-created Astoria River Clean-Up Fund." 

NB: This post first ran in 2010. It is useful to note that if you Google the above fund you'll find it never existed. Thanks, gummint. 

Officials estimated the tax would generate $10 mil for the fund over four years.  Oops.  Behavior modification worked this time, probably because there are easy alternatives to traditional grocery bags.  Disposable bag use dropped from 22.9 mil in Jan. '09 to 3 mil in Jan. '10.  Projected revenue deficit using current figures = $3 mil in four years.

Less plastic waste, good.  Less than planned revenue, maybe not so good.  The DC council is going to have to choose between cutting back the newly-created river clean-up campaign or finding new ways to fund it.  Cutting back on gummint spending or finding new ways to fund it.  Which do you think is more likely?

The gummint counts on you to keep on smoking, drinking, driving, gambling and putting your bagels in plastic bags.  If gummint can tax enough stuff and behavior then there will be sufficient revenue to do whatever it wants to do.  At least that's the plan.

But hey, DC newly-created a river fund and newly-created another tax to pay for it and the heck with schools.  I wonder whose relatives and friends and contributors got newly-created jobs with the fund.

Crack cocaine is out of control in DC.  (See Councilman Barry's arrest record.)  How about a newly-created DC crack tax aimed at both revenue and behavior modification?  Good luck with that. 

Remember, it is not the job of government to "newly create" projects when they sniff a possible new sin tax.  That's backwards, and their budgets are already under water.  It's YOUR money, even when it's in their hands.  You have entrusted it to them to spend it wisely and effectively and it's your job to see that they do.  If they don't, you know what to do.

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What right does Congress have to go around making laws just because they deem it necessary?

Marion Barry

It was an awful lease for the city, but now we've put a cap of $610 million on the costs.

Marion Barry (again... really)