I have a confession.
I drink alcohol.
I enjoy soda, too. Potato chips? Love ‘em.
So why are politicians posing as moral leaders and digging into my wallet over these simple pleasures? Well, simply because their vision is just as simple.
City, state and federal government officials have locked into the mindless notion that these “sin taxes” are either morally or economically logical. They couldn’t be more wrong.
It’s easy to find public support when you single out a faction that can be looked down upon as taking part in immoral behaviors, forgetting about individual rights or the ability for the public to make its own moral judgments.
But the truth is that sin taxes need to be resisted on both moral and economic grounds. By taxing products that are overwhelmingly purchased by those with lower incomes, it effectively amounts to a regressive tax, or a tax paid for by lower income individuals. The latest craze in this trend is California’s soda tax that would only add to the numerous regressive taxes in a state that already has the highest sales taxes. What’s next, fast food, cable? After that they better raises taxes for gym memberships too; people are sweating and sharing germs all over those places.
Sin taxes don’t just hurt the “sinners” either. They are anti-business too and have the ability to destroy hospitality businesses – restaurants, bars and hotels – that thrive on the sales of alcohol.
Now you can start to see the trail towards hurt – a loss of revenue in these industries means a loss of jobs and an eventual hammer to the economy. Government leaders shouldn’t try to alter social behavior with taxation and certainly shouldn’t create taxes that harm small businesses.
Eventually the government loses that expected revenue.
Government decision-makers need to stop setting smokescreens to distract from the true economic issues. You can only put so many band-aids over an open wound before you realize it’s probably time to see a doctor.
It’s time to stop the moralistic posing. Sin taxes are not the solution to the state’s economic issues.
James Spencer can be reached at jspencer@publicceo.com or on Twitter @publicceo