Thursday, February 18, 2010

Unnecessary do-goodism

The Governor of Massachusetts Deval Patrick has proposed that soda and candy be subject to the state sales tax law. Today's Boston Globe has chosen to defend that proposal on the grounds that taxing these products would "promote healthier diets for children." This is a really bad way to support a good proposal. Here's why.

The Massachusetts sales tax law is a very reasonable one. Everything is taxed except for "necessities" such as food, clothing, shelter and medicine. This does a pretty good job of cutting down the regressive nature of a sales tax. However, the law as currently applied seems to classify as food, by default, anything that is edible -- except alcohol, which used to be exempt but is now taxed.

The tax on alcohol is an interesting example. Booze is certainly edible, but hardly could be counted as either nourishing or necessary. Many liberal do-gooders jumped up to support taxing it on the grounds that a tax would discourage consumption of a product they consider unhealthy. This is the unpleasant activist version of the Golden Rule which says "Do unto others as you would have them do unto you." (Instead of the less meddlesome one "Do not do unto others as you would hate them to do to you" -- sometimes attributed to Rabbi Hillel.) The Globe position on candy and soda is based on a similar philosophy: Tax these because we think they are bad for you and we don't mind the tax.

It is interesting to note that since the sales tax on alcohol went into effect on August 1, alcohol sales have increased. No one can say for sure why, but they haven't decreased.

The point is that one can make a good case for taxing both alcohol and candy/soda, without becoming an advocate of using tax policy to enforce a paternalistic "doing what's good for you" attitude. The idea is to use that fact that exemptions to the sales tax are for items that are considered necessities or sustenance. Clearly nourishing food, reasonable clothing, shelter and medicine fall into these categories. Neither alcohol nor candy and soda are nourishing or life-supporting. On the other hand, fatty meat and cheese (a source of worry for the Globe), and prepared or highly processed foods are. With moderation you can live -- even prosper -- on these. Try living on whiskey and candy though.

Thus, the basic principles underlying the sales tax law are sound and reasonable. You don't need a do-gooder mentality -- resented by most people -- to remove the exemptions for alcohol and candy. Just observe that they aren't nourishing so don't rate special treatment any more than car wax, sphagnum moss, or chewing tobacco.

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