The Sin is the Tax

So-called “sin taxes” are appropriately named, because it is morally wrong to forcibly transfer wealth even if the taxes discriminate against politically-incorrect behavior. Here’s the latest from the Rocky Mountain News:

…Denver Democrat [Rep. Jerry Frangas] very quietly drafted a bill introduced this week that would raise alcohol taxes 2 percent to cover all of Colorado’s 180,000 uninsured children.

The tax of 11 cents, for example, on a $5.49 six-pack of Budweiser, would raise about $57 million for the state children’s health care program. When paired with federal matching funds, Frangas said it would provide up to $150 million.

In other words, through the magic of federal “matching” welfare payments, Frangas can capture a portion of the national income tax by imposing a state sales tax. That way, Frangas can also force people in every other state to fund the health care of select Coloradans. Ah, the glories of federalism in the modern age.

But socialized medicine is fine, “for the children,” right? On the contrary, generally parents have a moral obligation to fund their own children’s health-care expenses, and they should plan their families and expenses accordingly. Of course, parents whose children suffer unexpected, catastrophic illnesses already benefit from a wide array of voluntary charity programs (often in addition to insurance payments), as is appropriate. All of us want to see innocent children taken care of, which is exactly why even today’s mixed economy often provides for their needs and why a truly free market would do so even better. However, unlike force-funded welfare, voluntary charity is more likely to discourage dependency and irresponsibility on the part of the parents. Offhand, I don’t have a good estimate for how much socialized medicine “for the children” displaces private insurance (and discourages parental responsibility), but the figure is large. And, obviously, socialized medicine “for the children” is merely a stepping stone to socialized medicine for everyone. As one advocate of politically-funded medicine reportedly said, “[S]ome of you may think of me as an incrementalist. I prefer to think of myself as a sneaky sequentialist.”

If politicians really wanted to help, they would repeal the interventions that have artificially increased the costs of health care and insurance and reduced access to medical services especially among the poor (as Lin Zinser and Paul Hsieh explain.)

What about a tax on alcohol? I oppose sales taxes in general. But, so long as there is a sales tax, it is wrong to discriminate against some people (in this case consumers of alcoholic beverages) and select legal activities. No doubt advocates of the tax on alcohol will argue that the tax would fund a “worthy” welfare program while discouraging a vice. But it is the proper role of government to protect individual rights, not to socially engineer behavior desired by politicians. While obviously alcohol can be abused — as can many other properly legal products — there is nothing inherently rights-violating or irresponsible about drinking alcohol. And purchasers of alcohol ought not be uniquely forced to subsidize other people’s children.