Sin Taxes are a Scam

Do you remember as a child how you would react when told by someone (usually older and wiser) that you could NOT do something? I have three young children, and I can see exactly what thoughts fly through their mind after I have ordered a “cease and desist”. All of a sudden, the thing that they were doing is not something they “want to do”, but rather something “they HAVE to do”. When you issue a command to a child, they invariably now must proceed against your orders. It’s human nature.

Well, apparently the folks in Minnesota (and let’s be honest – around the country) have not figured this out. At the end of June, the price of cigarettes in MN will jump by almost two dollars a pack. Many MN smokers are stocking up now before the price increase goes into effect. Local store owners are expecting huge dips in revenue from cigarettes once the tax increase kicks in, but does that mean less smoking? Probably not – it’s far more likely that the sin tax will drive the person being taxed to an alternate source for that good.cigtax

While we might consider the goal of curbing unhealthy behavior a noble one, I’d argue that we are likely doing more harm than good by introducing such measures.

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First, the government doesn’t care about your health. The government cares about revenue, and sin taxes help the government create revenue out of thin air. Here’s how – you have to pay more money for the good that you are purchasing. Only that money doesn’t go to any of the people that might be providing the good you desire; the money goes directly to the government, not because they’ve helped manufacture the good in any way, but simply because they were looking for a place to increase revenue and your vice seemed like a good place to find some money.

Second, the entire system is completely unjust. Sin taxes are generally arbitrary measures taken against a minority of the population simply because legislators know that group likely won’t fight back and they know the group will very likely pay the extra money for the product. The best example of this is smokers – no matter how high you drive up the cost of cigarettes, they will find a way to pay the price. Honestly, the only people who complain about the smoking sin tax are Libertarians. Not necessarily because they are smokers, but because of the principle of the matter. Most smokers can’t even get riled up enough to fight the extra tax burden. Most people here about the price of cigarettes going up and respond positively, like smokers deserve it because the practice is annoying.

Third, sin taxes breed the development of black markets, which are generally unsafe, and not in the best interest of public. In the article I linked to from Minnesota a man was stockpiling his supply of cigarettes now, before the increase in the sin tax. What will likely happen is that he will either smoke the entire stockpile himself, or when a fellow smoker has run low and doesn’t want to pay full boat for a new pack they may come to him for a cheaper supply. The differing costs of goods in markets around the country and the world means that someone can always get something cheaper. By raising sin taxes on certain goods to “uncomfortable” levels, we create the opportunity for someone to step in, outside of the law, and fill the need at a profit for himself. We’ve seen this before with alcohol during Prohibition and with illicit drugs over the last 50+ years.

Fourth, what right does the government have to decide which goods are beneficial for us and which goods are not? The short answer is that the government has no say in these decisions that we make for ourselves. The problem is that over the years, as we have devolved further and further into a welfare state, we have opened the door to allow the government more opportunity for say in our daily lives, and it is to our own detriment. When we ask for socialized healthcare, we are begging the government to tell us what we can and cannot do, because now the government has a vested financial interest in our health. The same is true for any welfare scheme – social security, Medicare, Medicaid, WIC, etc. Any time we ask the government to pay our costs for something, we invite their opinion on how we should live and conduct our lives because we have now become debtors to them.

If you want to make sure that in the near future the government is not encroaching on your freedom to live as you would like to live, then we must divorce ourselves from the welfare state.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by EagleRising.com


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