Drugs and Taxes

Reportedly Massachusetts Representative Stephen Lynch recently referred to a proposed beer tax increase as a hate crime. And according to the AP this week, "A bill to tax and regulate marijuana in California like alcohol would generate nearly $1.4 billion in revenue for the cash-strapped state, according to an official analysis released Wednesday by tax officials." These types of taxes are typically called 'sin taxes'. Why do you think that is?

The former is an attempt to fund the Obama administration’s health care reform program. The latter, as mentioned, is to generate more revenue for a state. Would either work? Should they?

One blogger denounced the health care sin tax for three reasons. His first argument is that they don't work. He cited that people will then buy less, resulting is less revenue for the government. But is increased revenue the true purpose of a sin tax? Isn't its purpose being that since you're going to 'sin' anyway, you should pay for the ill effects you'll be causing by your 'sinning'? Increased alcohol consumption results in higher medical problems (and therefore costs) so why should others paying medical premiums pay more for others' bad decisions? If people really do consume less because the price is higher (due to taxes), then they'll increase their health resulting in decreased medical costs for everyone. I guess it depends upon what you mean by the tax 'working,' but it looks like it works to me. If they work then why not legalize marijuana in California? Remember our definition of something working in this regard: it decreases usage of something bad for us and/or society. Legalization increases use and according to the article, "Marijuana use would likely increase by about 30 percent once the law took effect...." So, no, it would be a bad idea to legalize marijuana in California.

The second argument was that these types of taxes result in job losses. Again, what is our goal? If tomorrow, all of a sudden, illegal drug usage stopped and all the drug lords and their ilk lost their 'jobs' would we cry foul? Wouldn't we be happy they lost that kind of 'job' and wouldn't we wish they would go out and get a legitimate job that would help rather than hurt society? One of the arguments for legalizing the use of marijuana is that it would create 'legitimate' jobs and businesses. It probably would--more EMTs, more police, etc.--but at what cost to society? California might be able to generate $1.4 billion in revenue, but how much of that would go toward counteracting the ill effects of marijuana use? My guess is that it would cost much more than $1.4 billion.

The final argument is that constituents don’t like them. I'm sure drug lords wouldn't like it if people stopped using their drugs either, but that's not the point. No one likes taxes to go up on the stuff they use. But should we be 'users' in the first place? Maybe the 'crime' here is not 'hating' the loss of controlling our own minds and giving that control up to a chemical.