Vice Squad
Wednesday, April 21, 2004
Taxing Vice

Today's Chicago Tribune runs an article (registration required) from the New York Times News Service on the possibility that sin taxes will be expanded in Texas:

"Gov. Rick Perry called the Legislature into special session Tuesday to change the way public education is financed in Texas. He wants to give billions of dollars in property tax reductions to the most affluent homeowners while making up part of the revenue loss through a vast expansion of legal gambling and increased 'sin taxes'--including a $5 tax each time a patron enters a topless bar...

Kentucky, Maryland, Missouri, Tennessee, Utah and West Virginia are among the states that have shifted part of the cost of schooling from taxes on income, sales and property to levies on gambling and nude or topless dances in the past few years. Other states are considering such plans, including New York."

The comments of a dancer named Rio were included in the article:

"She characterized it as immoral because it linked 'adult entertainment' with schoolchildren and because she saw it as a tax increase on the women like herself, who she said lack political influence.

'This is the lowest thing they could do,' she said. 'The governor wants to give the owners of the biggest houses a tax break and he wants women who have to take their clothes off for money to pay for it.'"

Vice Squad has a suggestion for the Texas Governor. Instead of taxing gambling and exotic dancing, why not prohibit these activities, with long mandatory minimum sentences imposed upon violators? Then, empower special police units to engage in all sorts of shady practices involving undercover agents, paid informants, and wiretapping. Then, pass a civil asset forfeiture law so that you can seize the money and property of anyone accused of violating the new anti-vice statutes. Make sure that the police get to keep a substantial proportion of the seized assets, to ensure diligence. Unlike your reckless taxation idea, my proposal has an established record of success in regulating vices.

Vice Squad has looked at sin taxes in the past. I will invoke the name of J. S. Mill again, as I mention that I have no principled objection to special taxes on vice. Here's part of Mill's discussion of sin taxes from Chapter 5 of On Liberty: " must be remembered that taxation for fiscal purposes is absolutely inevitable; that in most countries it is necessary that a considerable part of that taxation should be indirect; that the State, therefore, cannot help imposing penalties, which to some persons may be prohibitory, on the use of some articles of consumption. It is hence the duty of the State to consider, in the imposition of taxes, what commodities the consumers can best spare; and a' fortiori, to select in preference those of which it deems the use, beyond a very moderate quantity, to be positively injurious. Taxation, therefore, of stimulants, up to the point which produces the largest amount of revenue (supposing that the State needs all the revenue which it yields) is not only admissible, but to be approved of."

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