January 26, 2011
Drunk on Taxation
Speaking of statism, the Providence Journal editorial page betrayed its inclination in that direction, recently, on the topic of alcohol tax:
Congratulations. By beating each other's alcohol tax down to zero, neither New Hampshire nor Massachusetts is collecting revenues that it could.And where does this new era of tax-free booze to the north leave Rhode Island merchants with their 7 percent liquor sales tax? In a tough competitive place. ...
This region must start thinking of itself more as a confederation and less as a collection of six feudal rivalries. The six New England states should agree to a region-wide liquor tax. They could all end up richer.
"They," obviously, means the state governments, not the people of New England, who could, by the editors' advice be more extensively taxed if they were more effectively trapped by cooperating governments. Lost in the analysis — not even mentioned — is the benefit of this interstate competition to consumers, who are not, especially with alcohol, necessarily of the leisure class.
Yes, yes, we can all agree that alcohol is, in a technical sense, unnecessary, and sometimes, it turns wicked. But one's perspective on taxation and the relationship between the state and the people is much more broadly applicable.
Watching the exchange of dollars for alcohol and lottery tickets while in line at the liquor store, one is tempted to wonder what percentage of the taxes and gambling profit the government siphons off before handing the money back in the form of inefficient services. No doubt, the editors would defend their position suggesting that sin taxes force residents to support important government activities (such as infrastructure and education) that they'd otherwise let slip, if left to their own choices. That only returns to the statist point: it comes down to one group of citizens taking from another to support their own priorities, which they assume to be more important and which, in many cases, winds up benefiting them financially.
How clever - an editor at the projo has figured out that antitrust laws do not apply to state governments. While the merit of antitrust laws governing private businesses are highly debatable and in a constant state of revision by judges (which some would say indicates they have no idea what they are doing), collusion between state governments to stop interstate migration and reap the most taxes out of their citizens via their coercive powers is simply, dare I say it, evil.
Posted by: Dan at January 26, 2011 11:42 AMHow clever, Dan has figured out that anti-trust laws do not apply to businesses.
Change “state government” to “businesses”, “interstate migration” to “competition”, “taxes” to “profits” and “citizens” to “customers” and re-read Dan, the doctrinaire man’s statement and we have unfounded opinion substituting for real argument.
Substitute your own pet nouns and they will neatly fit into Dan’s one size fits all statements.
Try this one, quoting from Dan himself we get - “collusion between state governments (businesses) to stop interstate migration (competition) and reap the most taxes (profits) out of their citizens (customers) via their coercive powers is simply, dare I say it, evil.”
OTL - Antitrust laws DO apply to businesses, obviously, they simply don't do what they are supposed to do. Antitrust law has had a particularly messy and inconsistent history, and much of the case law conflicts with other case law even today. There are not so much principles are there are trends, and those trends change constantly. The biggest single problem is determining "market power," although progressives like to throw around that word like it actually means something definitive and scientific. Ask 5 different economists and you'll get 5 different answers as to what the relevant markers are. Courts struggle to even define the relevant market. Give me any corporate product and I can arbitrarily define the market boundaries to imply monopoly power or not. Economists who have studied the prices and outputs of so-called monopolies in the United States have found a profound lack of historical evidence of the kind of output lowering behavior that should be seen from truly monopolistic firms. A reasonable way to interpret this is that market economies are far more dynamic than has been theorized by central planners over the past century. You call me the doctrinaire, and yet you're the one who relies on century-old baseless theories with no hard proof. The hypocrisy coming from you is astounding. You have nothing but insults and knee-jerk reactions based on overestimation of your own knowledge and wisdom. For example, I would bet my life savings that you would call Walmart a monopolistic firm when nothing could be further from the truth.
Posted by: Dan at January 26, 2011 2:05 PMDan, pay no attention to OTL. He has political Tourette's.
Posted by: Contrarian View at January 27, 2011 5:34 AMOTL,
It appears to the casual observer that you are on a mission to torpedo every Dan comment whether it makes sense or not. The routine is getting boring. How about an opinion on the editorial.
Posted by: Max Diesel at January 27, 2011 12:06 PMDan
Do you live anywhere near Franklin County, Va. It was said to be the wettest county in the world. Their corn liquor was untaxed and unregulated before and after Prohibition.
"'They,' obviously, means the state governments, not the people of New England, who could, by the editors' advice be more extensively taxed if they were more effectively trapped by cooperating governments. Lost in the analysis — not even mentioned — is the benefit of this interstate competition to consumers, who are not, especially with alcohol, necessarily of the leisure class."
What a great observation (seriously). The ProJo writer thinks that by allowing greater taxing of the citizens, the "state" will be "richer." I thought the state was the citizens. According to the ProJo, the citizens of RI would be able to sleep better by knowing that their higher taxes had provided the state bureaucrats and their cronies with even more money to spend stupidly. Just think, for example, the RIDOT could place larger and even more idiotic letters on the India Point Park Bridge, or order even more substandard concrete for the I-Way. Yes, tax us more! Another reason why the ProJo is so hopelessly out of it.
Posted by: Bill at January 27, 2011 9:27 PM