Comments on: Taxes as behavior modification

By: Taxes as behavior modification :: The Fair Tax Blog

Taxes as behavior modification :: The Fair Tax Blog — Fri, 23 Sep 2005 17:47:41 +0000

[...] middot; Category: Education, Special Interests (This entry originally posted May 25, 2005 at unrepentantindividual.com. The argument is more for [...]

By: T. F. Stern

T. F. Stern — Thu, 26 May 2005 01:41:30 +0000

While I believe that a Flat Tax would tend to be more fair I am also aware of the greed involved when the government is involved. They will have “user fees” to take the place of income taxes to go along with consuption taxes. When you visit the zoo, there is a user fee, when you get your license plates there is a user fee. This will be expanded upon until, as the Beatles song says, “put rubber pennies on your eyes” and never forget, Washington has never understood that its our money, not their money. Until we get hold of the reigns and start reducing spending, which, unlike Washington’s definition of holding the growth of spending down, no, reduction of spending means to actually spend “less”; can you believe that such a simple thought is beyond our government leaders? Will the tooth fairy pay me for leaving a broken tooth under my pillow, will the Easter Bunny autograph my egg, and will congress ever reduce taxes; in your dreams…

By: Brad Warbiany

Brad Warbiany — Wed, 25 May 2005 15:02:23 +0000

How about TV’s, Jim? We should probably increase the tax on those, because Americans spend way too much time in front of them. And that leads to less exercise, which leads to fat people, increasing health care costs for the rest of us? And how about luxury taxes as well, because buying a BMW instead of a Kia should get you slammed with say, and extra 15% sales tax or so (that’d be fair, right)? Maybe we can combine the two, and tax TV’s at 15% for anything under 25″, but anything above is a super-luxury and we should tax those at 30%? Or, we can be Detroit, and tax fast food because we don’t like it. Heck, let’s take it farther. We don’t need books, expecially when the government provides these nice libraries for us, so let’s tax those too. And cosmetic surgery, because that’s completely unnecessary, so we’ll tax that at 50%. Of course, we can’t just tax everything, we need to exempt certain things. Let’s exempt bicycles and treadmills, because they lead to exercise. In fact, let’s subsidize the purchasers of those, giving them money, for the good choices they’re making! Let’s exempt fresh food, because that’s healthy, and slam a 20% tax on processed food, because it’s unhealthy. Somebody stop me, I’m on a roll!

The point is that there are about a billion things out there that people don’t “need”. There are countless different ways for “you” or “the majority” to determine which things are beneficial and which are not, which are needed and which are not, and how much we should tax or subsidize each. Why can you decide that alcohol and cigarettes deserve extra taxes, but that TV’s, luxury cars, etc etc do not? I’m a smart guy, and you’re a smart guy, but I’m not prepared to cede to you judgement of how much my behavior should be taxed. Why is it that you believe I should cede that judgement to you?

By: JimmyJ

JimmyJ — Wed, 25 May 2005 14:16:35 +0000

Brad,
I utterly disagree with you about the smoking and alcohol taxes. These are items which nobody needs, and you know going into the purchase that the tax rate is higher. I would much rather pay higher taxes at the liquor store than ask poor families to pay 5.5% on top of their loaf of bread and gallon of milk. The biggest problem with these taxes is that as they raise the price of cigarettes, they will eventually run the tobacco companies out of business. But there are plenty of states that use the tobacco settlements to balance their budgets or cover shortfalls in revenue, so where will the billions come from when everybody stops buying Marlboros?

By the way, Ohio decide not to increase the alcohol tax, but did raise cigarette prices by 25 cents per pack.

By: Brad Warbiany

Brad Warbiany — Wed, 25 May 2005 13:19:00 +0000

Lucy,
Excellent question. I wish I could say that the consumption tax or flat tax were completely fair in this sense. Unfortunately, no tax is completely fair, unless it is a per-person fee, universal for every resident (US citizen or not) for governmental services. However, the consumption tax or flat tax more closely approximates a truly value-neutral tax than anything we have today.

Also, thanks to Dan from nospeedbumps.com (now blogrolled) for pointing me towards his essay on flat tax proposals. I don’t think we can politically get a flat tax that has no loopholes or deductions whatsoever, but I agree with him that it would be the closer to the ideal tax than current “flat tax” proposals.

By: Bruce Grossberg

Bruce Grossberg — Wed, 25 May 2005 10:28:12 +0000

This reminds me of living in Los Angeles during the drought of 1990, which for all I know is still going on. After being warned endlessly about our need to conserve water, the Los Angeles Water Authority petitioned to have the price of water raised — not to tax consumption — but because conservation efforts had been so successful, that the Authority wasn’t getting enough cash in to pay for their expenses — which I assume included trips to places where water was more plentiful.

By: Lucy Stern

Lucy Stern — Wed, 25 May 2005 04:15:38 +0000

What about the flat tax or the consumption tax?