Mor Rioghan,

Yes mam. Thank you.

The search for government revenue in fiscally tight times tempts legislators to raise revenue by imposing unusually high excise taxes on cigarettes, liquor, gambling, and, in Europe, on gasoline. This type of charge is often called a "sin tax", and appeals to voters who view it as a way of discouraging consumption of certain objectionable products. In one of her threads, Lilith referenced a German city that plans to tax commercial sexual intercourse, so I guess that services should be also included.

In economic terms, the sin tax is not different from any tax designed to discourage consumption. Every dollar taken away from people through this approach is one dollar less saved or spent on other pursuits.

If the government is seeking to make people pay for actions deemed socially costly or sinful, it makes the most sense for these people to be taxed directly for the right to sin. Yet there are very few examples of this binary model of the sin tax. Instead, the modern sin tax is usually triangular. Not only is the consumption itself discouraged by government policy, but all those engaged in feeding the desire to sin, and making the sin available, are also taxed.

This regressive tax is especially cruel towards the poor, who spend a disproportionate amount of their income on products deemed sinful under a consumption tax. It takes money from their pockets when they buy the goods for which they have a strong demand, and leaves less for them to spend on their rent, food, clothing, and the like. The supposed virtue of the consumption tax is that it hits every consumer of the good equally. Yet the poor are the ones that can least afford the tax, are the ones most in need of discretionary income, and are therefore the ones hit hardest. This is neither good statecraft nor good economic policy. It is also unjust.

The sin tax fails to consider the crucial distinction between vice and crime. Before we empower the government with what are, effectively, pastoral responsibilities, we ought to consider fundamental issues regarding the interplay between private morality and public policy.

The sin tax is one of the few taxes presumed to have an overt moral justification. I say "overt" because other taxes imply certain covert moral categories. For example, the US taxes the return on capital at a higher rate than income that flows from pure wages and salaries. This "capital gains tax" implies there is something less morally legitimate about making money through risk and investment than there is from taking home pre-set wages and salaries.

When the state treats a certain behavior as sinful and thus particularly taxable, it assumes certain moral categories. It says that the taxed behaviors are less morally justifiable than other forms of behaviors, and therefore more justifiably taxed. The moral reasoning behind such a tax is clearly evident. Punishing wrong doers is among the usual lists of powers appropriate to government. What is not obvious is why the central state puts itself in the business of determining the sinfulness of certain behavior given that the taxed sins are not directly invasive of other peoples' rights.

Compare smoking and drinking, for example, with crimes against person or property. While the state declares drinking and smoking to be sins vulnerable to added levels of taxation, it also admits that these behaviors are less objectionable than theft or murder. We don't, for example, have anything like a murder tax or a theft tax, although one could suggest that the cost of a good (successful) legal team represents a "tax" on ones behavior. When a citizen steals something from another person, he is not taxed; he is tried and convicted as a criminal. Neither are the sins being taxed considered violations of the civil code. Instead, the state simply taxes the behavior in an attempt to raise revenue and discourage the behavior.

Governments always act on moral premises of some sort. Punishing crimes against person and property are acts of moral sanction. But to entrust the state with sweeping social responsibilities is to forget the crucial distinction between society and state. Democratic government is limited government. It is limited in the claims it makes and in the power it seeks to exercise. Limited government means that a clear distinction is made between the state and the society. Other institutions - notably the family, the Church, educational, economic and cultural enterprises - are at least equally important actors in the society. They do not exist or act by sufferance of the state.

Do we want to charge politicians and bureaucrats with sanctioning sins in areas that are morally ambiguous? Or should this task be left to community, family, church, and tradition -- social institutions that are often more trustworthy in determining the limits of non-violent behavior?

A classic statement regarding non-violent forms of social behavior which are nonetheless frowned upon was made by John Stuart Mill:

"That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because in the opinion of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him or persuading him, or entreating him, but not for compelling him, or visiting him with any evil in case he do otherwise. To justify that, the conduct from which it is desired to deter him must be calculated to produce evil to someone else. The only part of the conduct of anyone, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself, his independence is, of right, absolute." 1859 (On Liberty, Chapter 1)

It is a mistake to entrust the modern state with the enforcement of certain moral codes of behavior that extend beyond obvious crimes against person and property. When government is allowed to go beyond these limits and enforce a wider array of moral issues, it will substitute its own form of morality for traditional morality. A government program like recycling, for example, could be deemed more morally worthy than traditional virtues like personal integrity. Obeying securities regulations could be seen as the very heart of virtue, whereas teaching children at home could be seen as a vice. The government's sense of morality, especially when it is influenced by excessive power, is often at war with traditional standards and common sense.

I forget where I read it, or who wrote it, but I remember reading a piece which described the state's temptation to enter private life on behalf of society. Basically, the author asked why limit the government's benevolent involvement to the protection of the individual's body only? Is not the harm a man can inflict on his mind and soul even more disastrous than any bodily evil? Why not prevent him from reading bad books and seeing bad plays, from looking at bad paintings and statues and from hearing bad music? The harm done by bad ideologies, surely, is much more grievous, both for the individual and for the whole society, than that done by drugs.

OK, I overstate my case, but indulge my poetic license for effect.

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Eudaimonia