Taxing Sin Book PDF
Preview Taxing Sin Book
Michael Thom Taxing Sin Michael Thom Taxing Sin Michael Thom Sol Price School of Public Policy University of Southern California Los Angeles, CA, USA ISBN 978-3-030-49175-8 ISBN 978-3-030-49176-5 (eBook) https://doi.org/10.1007/978-3-030-49176-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval,electronicadaptation,computersoftware,orbysimilarordissimilarmethodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such namesareexemptfromtherelevantprotectivelawsandregulationsandthereforefreefor general use. Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinforma- tion in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respecttothematerialcontainedhereinorforanyerrorsoromissionsthatmayhavebeen made.Thepublisherremainsneutralwithregardtojurisdictionalclaimsinpublishedmaps and institutional affiliations. Cover illustration: eStudio Calamar This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgments Bringingthisbooktoprintwasapainintheyou-know-what.Thereisno other way to describe it. After an editor at my initial publisher went radio silent, I sent my proposalofftoseveralothers.Someeditorsrespondedandofferedhelpful feedback, but not an offer to publish. It was frustrating, to say the least. Then,arayofhope.Aneditoratalargepublisherexpressedinterestin the project and said he would write more in a day or two. He never did. I followed up, but to no avail. That editor ghosted me. Months later, another ray of hope. An editor at a different academic press said he was interested. I’ll respond after Thanksgiving, he wrote. He did not, so I followed up. I’ll get a contract to you Monday, he replied. Monday came and went. So did Tuesday, Wednesday, Thursday, and Friday. Then, the Monday after that, a promise to have the contract to me “by tomorrow.” That deadline came and went. No contract. No explanation. I inquired but received no response. That editor ghosted me, too. Neither ghost was not dead, of course. Each one was alive and more than well enough to post on Twitter. (Yes, I checked.) That is why I have to offer my deepest gratitude and thanks to Nick Barclay, my exceedingly competent—and responsive—senior editor at Palgrave Macmillan. The publishing process could not have gone any better.Nick’sprofessionalismisgreatlyappreciated.He’snoghost,that’s for sure. v vi ACKNOWLEDGMENTS Thanks are also due to the many individuals, some known and others unknown, who reviewed this project at various points of completion— even the reviewer who sniffed at my appeal to “layman’s logic,” as if that wereathingoneshouldnotdo.Yourconstructiveremarksmadethebook better. Thanks are also owed to the many people who were kind enough to ask me how my research was going. There were times when I forgot I was writing a book about sin taxes—or wanted to forget I was writing one—but you never did. Thanks, Mom. Thanks, Luis, Luke, Elizabeth, John, and Michael. And thank you, too, Ben. You’re awesome. Contents 1 Tax Your Sins, Experts Say 1 2 Taxing Soda 23 3 Taxing Alcohol 55 4 Taxing Tobacco 87 5 Taxing Marijuana 123 6 Taxing Twenty-First Century Sins 153 7 Conclusion: Don’t Tax Sin, Forgive It 177 Index 183 vii CHAPTER 1 Tax Your Sins, Experts Say Our moral reformers, so often given to intemperate words and contemp- tuous measures, have been instrumental to a large extent in accustoming the American mind to habits of over-statement and unmitigated rebuke, which are unfortunately now becoming a national disease. The New York Times, 1854 Each is the proper guardian of his own health, whether bodily, or mental andspiritual.Mankindaregreatergainersbysufferingeachothertoliveas seems good to themselves, than by compelling each to live as seems good to the rest. John Stuart Mill, 1859 Theword“sin”comesfromtermsinearlyJewishandChristiantextsthat refer to an individualwho committed an error,went astray,or missedthe mark. The notion raises profound questions that theologians have wres- tled with for thousands of years. How does an individual know whether a choice is sinful or not, especially if scripture offers no indication? Who makes those judgments? What must a sinner do to reconcile with others andGod?Shouldsinnersflounderinimperfectionorstriveforperfection? While church and state may be increasingly separate, parallel themes dominate public policymaking. Which choices and behaviors in society areacceptableandunacceptable?Whomakesthosedistinctions?Onwhat basis? What restitution is due from those who make the wrong choice? Should governments aim to help individuals muddle through a world of imperfect choices, or should governments push society toward utopia? © The Author(s) 2021 1 M. Thom, Taxing Sin, https://doi.org/10.1007/978-3-030-49176-5_1 2 M. THOM If there is a meaningful difference between sacred and secular approaches to those who have committed an error, gone astray, or missed the mark according to their respective standards, it is the path to redemption. In most religious traditions, atonement comes through repentance and divine mercy. Governments, by contrast, often incarcerate their transgressors to ensure they “pay their debt to society.” And although most denominations have abandoned efforts to monetize forgiveness, governments charge some of their sinners for redemption every day. Taxing Sin is about a particular kind of secular redemption—paying a tax—for a particular kind of secular sin—the choice to buy something the government says you should avoid. Sin taxes have been applied to alcoholic beverages and tobacco products for some time. By the twenty- first century, they spread to soda and marijuana alongside calls to expand the list of tax-worthy items to include plastic bags and meat. Some went further and demanded a tax on robots and carbon. Against that momentum, Taxing Sin argues that classifying certain goodsasdeservingofaselectivetaxisafolly—afoolish,ineffectivepolicy for governments to control our choices. To understand why that’s the case, it is important to understand the reasons why so many put their faith in the redemptive power of government—and taxation. ∗ ∗ ∗ Governments have charged sin taxes for hundreds of years.1 By the sixteenth and seventeenth centuries, taxes on alcohol, tobacco, and other goods appeared throughout the Americas, Europe, and the Middle East. In 1574, Holland imposed an alcohol tax to fund a revolt against Spain. King James VI of England ordered a tobacco tax in 1604 because he believed smoking was a “foolish vanity.” The Ottoman Empire levied 1Sin taxes have, in the past, been referred to as sumptuary taxes, which were part and parcel of sumptuary laws dating back centuries that sought to discourage choices deemed immoral by governing authorities. In some instances, sumptuary laws did not target intrinsically sinful choices but instead attempted to enforce a class system. For example, certain laws banned the poor from wearing types of clothing that were typically worn by the wealthy. Other laws, particularly during the reign of Edward I in England, sought to curb meat consumption. In 1216, he proclaimed that too many “persons of inferiorrank”imitatedthe“greatmen”ofthetimebyeatingan“outrageousandexcessive multitude of meats,” which led to “many great evils.” 1 TAX YOUR SINS, EXPERTS SAY 3 taxes on tobacco and coffee—yes, coffee—in the eighteenth century to financestipendsfortheulema,agroupofIslamicscholars.Federalalcohol andtobaccotaxesintheUnitedStateshelpedbankrolltheRevolutionary War, the War of 1812, and the Civil War. Those early taxes targeted different choices at the behest of varying motives but had two common traits. First, the tax applied to a small numberofgoods.2Andsecond,itwasoftentemporary.Sometaxesended after military conflict subsided, some ended when regimes changed, and some ended after collection proved difficult. Neither is true anymore. Sin taxes appear on a growing list of items and are a permanent fixture of government budgets around the world. That shift resulted from an evolution in the relationship between citizens and their government. The drive for sin taxes now is paternalism, a belief that governments should interfere with an individual’s choices for their own good, for the goodofsociety,orboth.Thosewhosupportpaternalism—let’scallthem paternalists—include experts, policymakers, journalists, special interest groups, philanthropic organizations, and much of the public. Paternalists believe that governments should enact policies to discourage individuals from making choices that experts say are harmful—choices that commit an error, go astray, or miss the mark for assorted secular reasons. The choice can be drinking a soda or an alcoholic beverage. It could be smoking a cigarette or marijuana. Or it might be eating meat, using a plastic bag, or employing robots to eliminate a job. Paternalistsembracetaxationasawaytoredeemharmfulchoices.They viewsintaxesasawin-winproposition.Thethinkinggoessomethinglike this:byusingataxtoraisethepriceofharmfulgoods,individualsbuyless ofthosegoods.Theirwell-beingwillthusincrease,andsocietyoverallwill benefit. Individuals who purchase the goods anyway pay taxes that fund governmentprogramsthatbenefitsociety,thusatoningfortheharmtheir choice has created. In other words, forgiveness is just a tax away. Paternalism is a thought-provoking viewpoint, one that is simultane- ously principled and patronizing. It stems from what economist Thomas 2That the taxes were often levied on only a few items did not mean the burden was intendedtofallonasmallnumberofindividuals.InhisseminalWealthofNations,Adam Smithin1776remarkedthat“sugar,rum,andtobacco”wereworthyoftaxationnotonly because of their harm, but because they were “objects of almost universal consumption.”
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