Abstract
This chapter explains how sin taxes became a near-permanent strategy for governments to alter individual choice. It describes how sin taxes evolved from a politically- or religiously-motivated policy to the present-day conventional wisdom, which holds that sin taxes serve as economic penance for externality-generating choices and as a correction for cognitive biases. It illustrates how the conventional wisdom traces to the progressive era and its belief in the power of experts to diagnose and cure societal ills, especially those involving public health. The chapter contrasts that vision against criticism that paternalism overvalues experts’ abilities and that, despite its success in politics, paternalism tends to fail in practice.
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Notes
- 1.
Sin taxes have, in the past, been referred to as sumptuary taxes, which were part and parcel of sumptuary laws dating back centuries that sought to discourage choices deemed immoral by governing authorities. In some instances, sumptuary laws did not target intrinsically sinful choices but instead attempted to enforce a class system. For example, certain laws banned the poor from wearing types of clothing that were typically worn by the wealthy. Other laws, particularly during the reign of Edward I in England, sought to curb meat consumption. In 1216, he proclaimed that too many “persons of inferior rank” imitated the “great men” of the time by eating an “outrageous and excessive multitude of meats,” which led to “many great evils.”
- 2.
That the taxes were often levied on only a few items did not mean the burden was intended to fall on a small number of individuals. In his seminal Wealth of Nations, Adam Smith in 1776 remarked that “sugar, rum, and tobacco” were worthy of taxation not only because of their harm, but because they were “objects of almost universal consumption.”
- 3.
- 4.
- 5.
Quoted from “Speech on the Oregon Bill,” delivered June 27, 1848.
- 6.
Ross (1901).
- 7.
Croly (1909).
- 8.
Cooley (1909).
- 9.
The New Republic (1915).
- 10.
Seligman (1890).
- 11.
The belief that society should adhere to a hierarchy composed of an elite, ruling few and an ignorant, obedient many did not originate in contemporary progressive thought. Plato’s Republic, written around 375 BCE, described a society of educated “guardians” presiding over the masses.
- 12.
Goodnow (1916).
- 13.
Fink (1997).
- 14.
Fisher (1907).
- 15.
- 16.
Langum (1994).
- 17.
This seemingly odd pairing was a variation on the “Bootleggers and Baptists” concept of alcohol regulation during the same era. But it should not come as a surprise; progressivism’s communitarian emphasis resonated with many Protestant denominations. Progressive minister Washington Gladden wrote that individualism “is not a sound basis for democratic government” and that individuals who failed to embrace the “brotherhood of man” could not believe in God (Gladden 1905). Progressive Baptist theologian Walter Rauschenbusch argued Christian churches should teach believers that they are not individuals with rights, but members of a community. Any emphasis on individualism, he warned, “neutralizes the social consciousness created by Christianity” (Rauschenbusch 1907).
- 18.
- 19.
Miron and Zwiebel (1991).
- 20.
Morone (2003).
- 21.
Lohmann and Weiss (2002).
- 22.
Crain et al. (1977).
- 23.
Carruthers (2016).
- 24.
Leonard (2017).
- 25.
- 26.
Jolls et al. (1998).
- 27.
- 28.
Wright and Ginsburg (2012).
- 29.
Anderson (1997), Mitchell (2004), Veetil (2011), and Whitman and Rizzo (2007). Tobacco is an instructive case. Taxes on cigarettes and other tobacco products were initially low, only to rise over time. Increases were often enacted alongside minor anti-tobacco nudges, including public health campaigns and laws mandating product warning labels. That evolved into smoking bans, first in limited areas and later nearly everywhere. Many experts now call for total tobacco prohibition, just as experts did during the progressive era. The movement has truly come full circle.
- 30.
There are too many examples to cite, but four merit a mention: Halberstam (1992) examines how experts led the United States into the Vietnam War, Hall (1982) and O’Toole (2007) explore urban planning failures, and Leonard (2017) documents how progressive experts, especially economists, led the American eugenics movement.
- 31.
Ioannidis et al. (2017).
- 32.
- 33.
Jolls et al. (1998) acknowledge the possibility of bias affecting bureaucrats but nevertheless return to their central argument that bureaucrats pursue soft paternalism.
- 34.
- 35.
Bellé et al. (2018). Of the cognitive biases, the authors wrote, “architects of public organizations and services should account for them.” Yet no indication was given as to what biases the “architects” might have or how to overcome them. Perhaps that matter is best left to the architect of the architects. See also Cooper and Kovacic (2012), Moynihan and Lavertu (2011), and Roberts and Wernstedt (2019).
- 36.
- 37.
- 38.
- 39.
Viscusi and Gayer (2010).
- 40.
Hayek (1952). One of Hayek’s arguments was that early twentieth-century economists introduced a progressive sensibility to their discipline. Instead of viewing society as being composed of free-thinking, unpredictable individuals, they embraced the idea that society was an interconnected organism that could be studied and altered through methods like those used in the natural sciences. Beyond that, social scientists may also have been envious of the speed at which natural sciences developed and improved quality of life. When central planning failed to accomplish the same advancements, many doubled down, furthering their embrace of scientism. See also Haack (2013).
- 41.
Franco et al. (2014). Knowing that this bias exists, some researchers refrain from even attempting to publish their findings if they contradict or question majority thought, which is known as the “file drawer problem.”
- 42.
- 43.
Gigerenzer (2018).
- 44.
Rizzo and Whitman (2009).
- 45.
Hayek (1945).
- 46.
Mannix and Dudley (2015).
- 47.
Rizzo and Whitman (2009).
- 48.
Dadayan (2019).
- 49.
- 50.
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Thom, M. (2021). Tax Your Sins, Experts Say. In: Taxing Sin. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-49176-5_1
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