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.