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Sin taxes fatten big government very effectively

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POSTED October 22, 2012 12:00 a.m.

Taxing the sinners never works.

But it is an effective way of pitting one segment of the American public against another.

Two such measures are making their way through the political process. One in Richmond would tax businesses selling drinks with sugar. The other is a plan in Chicago to tax bullets.

The cause, as always, is noble. In the working class Bay Area community, Richmond leaders backing the ballot measure that would slap a penny per ounce tax on soda regardless of how it is sold say they’re taking aim at childhood obesity.

In Chicago, the stated goal is to reduce gun-related deaths.

Rest assured that if both pass the only thing that will happen is government will get fatter and honest law-abiding citizens will get shot in the pocketbook.

The problem in Chicago is obvious. The murder rate and number of people shot annually in Chicago makes Oakland seem violence-free. Chicago leads the USA in gun violence with 1,121 people hit in the first six months of this year. That’s an average of just under seven people a day hit by bullets. By comparison, New York City — with three times the people — had only 790 people shot during the same time period.

Police in Chicago recovered 4,000 guns in the first half of this year compared to 1,400 in New York City.

The Cook County governing board where Chicago is located wants to impose a nickel tax on each bullet sold plus $25 on each firearm at the time of purchase. If the $1 million such a tax would generate went to keeping firearms out of the hands of dangerous individuals you might be inclined to support the tax. But it is simply going to help fund the $2.9 billion overall county budget.

The same board last year upped the alcohol and tobacco taxes in Cook County. Again, the money didn’t go to programs such as anti-smoking, health programs or even efforts to combat irresponsible drinking. The extra money went to fund government as a whole.

In Richmond, they say the soda tax could generate up to $8 million a year to potentially fund school sports programs, underwrite health care for diabetic children, and help fund healthier school meals. Supporters believe it will reduce type 2 diabetes, dental disease, heart attacks, and obesity that can trigger a lot of other ills.

  That’s all fine and good except there is no specific language in the tax measure saying that would happen. Politicians, though, have done their best to continue the ruse by placing an “advisory measure” on the same ballot asking if proceeds should be used for sports and health education programs “aimed at local youths.”  Voters may agree that’s how it should be spent but there is no legally binding requirement for the City of Richmond to do so.

Roseanna Ander - the executive director of the University of Chicago Crime Lab - is quoted as saying that for youth thinking about criminal activity “Even a small markup in the price of a firearm” or bullets could prompt them not to spend cash for that purpose or delay their decision to commit a crime.

That flies in the face of reality as documented in several studies including one conducted in a South Side Chicago neighborhood in 2007 by the Economic Journal.

That study found that most weapons used in Chicago crimes were bought on the black market, almost always at prices with a significantly higher markup than through legitimate sources. As far as bullets go, those are rare on the black market. The study cited one instance where a youth spent $50 to buy 10 bullets. That’s roughly 50 times the market price.

A nickel a bullet tax and a $25 additional tax on firearms beyond the federal excise tax won’t do anything to deter violence except to assure law-abiding citizens will be taxed for sins they don’t commit.

If you think the bullet and soda taxes are effective ways to change behaviors and aren’t just excuses to increase unrestricted revenue to government, consider tobacco which is arguably the heaviest taxed “sin” in the United States.

A 2012 Surgeon General report shows that teens - the ones who can arguably least afford it - are smoking at rates much higher than adults. Some 25 percent of high school seniors are smokers compared to 33 percent of young adults and 20 percent of adults. That is in addition to 10 percent of the high school seniors using chewing tobacco and one in five high school seniors smoking cigars.

Between excise taxes on tobacco and sales tax a smoker in California is paying $5.71 for a pack of 20 cigarettes that includes $1.26 in taxes or just under an effective 25 percent tax rate. That’s nothing compared to New York  where $4.74 in taxes — almost the same as the overall price of buying a pack in California — pushes the end price to the consumer to $10.14.

The bottom line: All sin taxes enable the worst addict of them all: big government.

 

This column is the opinion of managing editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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