To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Thursday, May 21, 2009

What a Way to Get Your Jollies: Taxing Poor People

Matt Yglesias teaches -- Picking on Poor People 101:

Suffice it to say, however, that the real value of taxes on beer, wine, and liquor has declined substantially over the past fifty years. So an increase of this sort would not be an unprecedented burden on the American consumer, it would be more like a return to the level of taxation that existed a few decades ago.[...]

But when you consider that universal health care is highly desirable and has to be paid for somehow, I think this is a pretty attractive way of going about it. The economic efficiency of this sort of tax is high, the public health benefits would be large. What’s more, the incidence would fall overwhelmingly on a relatively small number of problem drinkers (rather than the broad mass of people who drink moderately on social occasions) and the businessmen who profit off them, while the public health benefits from decreased drunk driving and alcohol-related violence would be broadly shared.
BTW, He's piggybacking off of this USA Today article highlighting an alcohol tax that is working its way through the Senate.

Maybe I need someone to explain these taxes to me...See, I thought people argue for them because they are a popular way to create additional revenue streams. They also want to discourage people from unhealthy behavior. They might actually do that, like cigarette taxes have, and then revenue drops as less people buy the good. Success? Or failure?

What about the people who don't stop? Does anyone who advocates these taxes have any issues with making money from people that are in their words, making self-destructive decisions? That's a moral problem that I can't ever get pass. I don't personally care, or even feel bad for someone chooses to smoke, drink, shoot heroin, whatever. It's their choice. I make some of those choices. However, I have a problem with my government making money off of these people, who also tend to be in vulnerable demographics to begin with (income, race). Doesn't it seem slimy for a government to say "We are trying to help you quit because the decisions you are making are destructive to you and others." But then turn around and turn those decisions into a money-making scheme? It seems dishonest to me.

It would be more honest to either ban the substance outright that you think is so dangerous, or to just say that additional taxes are purely for revenue. I don't think you can claim to care about people as you simultaneously plot ways to make money from their poor decisions. I'm certainly not saying we should ban booze; we just shouldn't use tax policy in this fashion.

One more thing: Matt could have looked up the income statistics for regular drinkers. If he had bothered to do that he would have found that in 2007 males in the $10-19,999 income range had the highest instance of *heavy drinkers (9.6%). Males making $55,000+ had the lowest percentage of heavy drinkers (4%). $20-34,999 is your basic middle class and they are at 7.2%. Comfortable taxing poor people Matt?

*CDC definition of a heavy male drinker is more than 2 drinks a day. Basically a heavy drinker is just a regular drinker.

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