More on Sin Taxes

Since my first post on the subject was so popular (he says, to an empty room) I thought I’d revisit the notion of vice taxes. Ostensibly, an effective vice tax is one that raises revenue while discouraging bad behavior. Oftentimes, preventing such behaviors can lead to even more savings. Take the example of liquor taxes. Preventing people from drinking prevents alcohol-related crimes from occurring, allowing money that would have been spent on law enforcement, the courts, and the prison system to be used elsewhere.

The ideal vice tax, then, generates both direct and indirect revenue. But I think it does a disservice to their usefulness to define them so restrictively.

Consider raising fines for drunk driving, as advocated by FiveThirtyEight’s Nate Silver. On its face, it fits the definition of the ideal vice tax. It raises revenue while providing further disincentive for drunk driving and all the negative consequences that go along with it. However, there is some spirited discussion in the comments section as to whether such a tax would actually deter drunk drivers. Were would-be drunks thinking rationally, the argument goes, they wouldn’t get behind the wheel to begin with. Steeper fines would do little to change an already irrational behavior that should be sufficiently discouraged by current penalties and a concern for one’s safety.

Now, whether drunk driving fines would do much to alter behavior I don’t know. But it would be a mistake to assume that the fines are an inherent failure in the absence of a noticeable deterrent effect. What’s wrong with forcing a drunk driver who puts everyone around him or her at risk to pay for a new hospital? A road? Public education? More “don’t drink and drive” programs? Deficit reduction? Nothing. Yet still we — and so, by necessity, politicians — cling to the idea that a tax or fine has to accomplish something specific and connected to the tax itself.

In our political system raising revenue for the sake of revenue has become almost taboo, on any level of government. And that’s very dangerous in a country where states and the feds are racking up record deficits. We can debate the merits of that spending all we want, but one thing that isn’t debatable is that that spending is happening and will eventually have to be paid for.


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About the Author

Brian Eason is a University of Missouri graduate with bachelor degrees in Journalism and Political Science. He has covered Congressional elections and local government for the Columbia Missourian and worked as a general assignment reporter for the State Journal-Register in Springfield, IL. Brian has also had articles published in Roll Call.

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