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Store: An Independent Institute Book
Co-publisher: Transaction Publishers
4 Figures • 17 Tables
© 1997 |
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TAXING CHOICE
The Predatory Politics of Fiscal Discrimination
Edited by
William F. Shughart II
Foreword by
Paul W. McCracken
So-called “sin taxes”—the taxing of certain products, like alcohol and tobacco, that are deemed to be “politically incorrect”—have long been a favorite way for politicians to fund programs benefiting special interest groups. But this concept has been applied to such “sinful” products as soft drinks, margarine, telephone calls, airline tickets, and even fishing gear. What is the true record of this selective, often punitive, approach to taxation?
Taxing Choice shows that the record of “sin taxes” has been anything but successful, as they have hindered economic progress and failed to deliver the promised social benefits. In addition, the costs of selective taxation fall disproportionately on lower income groups while politically powerful special interest groups benefit. “Sin taxes” also foster political corruption and self-serving, largely unaccountable bureaucracies. Furthermore, policies discriminating against certain products and behaviors through tax policy represent ominous trends that can easily be extended into other areas of life. If tobacco and alcohol are considered “dangerous” and subject to discriminatory taxation, what is to prevent the same taxes from being applied against fatty foods, sunbathing, or even obesity?
Nineteen distinguished scholars analyze the history, applications, and results of “sin taxes” in this volume. This is a timely and far-reaching book of great interest to economists, policy makers, historians, sociologists—or anyone who pays taxes!
Detailed Summary |
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Contributors
William F. Shughart II, Gary M. Anderson, Bruce L. Benson, Donald J. Boudreaux, Thomas J. DiLorenzo, Robert B. Ekelund, Jr., Paula A. Gant, Adam Gifford, Jr., Randall G. Holcombe, Bruce H. Kobayashi, Dwight R. Lee, Jonathan R. Macey, Paul W. McCracken, Adam C. Pritchard, Donald W. Rasmussen, Mack Thornton, Gordon Tullock, Richard Vedder, Richard E. Wagner, and Brenda Yelvington.
Table of Contents
- Section I: The Political Economy of Excise Taxation
- Chapter 1: The Economics of the Nanny State
- Chapter 2: Excise Taxes in Historical Perspective
- Chapter 3: Whisky, Parchment, and Margarine
- Section II: The Politics of Excise Taxation
- Chapter 4: The Politics of Selective Excise Taxation
- Chapter 5: Overcoming Taxpayer Resistance by Taxing and Earmarking Revenues
- Chapter 6: Excise Taxes to Fund Politically Correct Propaganda
- Chapter 7: Bureaucratic Incentives and the Transition from Taxes to Prohibition
- Section III: Alcohol and Tobacco
- Chapter 8: Prohibition—The Ultimate Tax
- Chapter 9: Predatory Public Finance and the Origins Of the War on Drugs 1984-1989
- Chapter 10: Taxation of Alcohol and Control of Social Costs
- Chapter 11: Taxation and the Consumption of Wine—Are Excise Taxes the Answer to the Healthcare Crisis?
- Chapter 12: Bordering on Chaos—Fiscal Federalism and Excise Taxation
- Section IV: Constitutional Liberties and Excise Taxation
- Chapter 13: Wealth Creation as a “Sin”
- Chapter 14: Strict Liability, Gun Control, and Excise Taxes
- Chapter 15: Civil Forfeiture as a Tax
- Chapter 16: Excise Taxation in the Rent-Seeking Society
Praise for Taxing Choice “Explicit manipulation of the tax system to control personal choices violates the long-standing principle that taxes should be general. Discrimination through taxation is as destructive to democracy and liberty as discrimination in any other form. Taxing Choice exposes the fiscal rot that ‘targeted’ tax adjustments represent.”
—JAMES M. BUCHANAN, Nobel Laureate in Economics, George Mason University
“Taxing Choice is an interesting volume. I share its dislike for arbitrary tax discrimination.”
—RICHARD A. MUSGRAVE, Professor of Economics, University of California, Santa Cruz
“Taxing Choice deals with extremely important issues. Most readers will probably be outraged—some because they agree with the analysis and some because they do not. Few will find it not to be provocative.”
—CHARLES E. McLURE, Jr., Former Deputy Assistant Secretary of the Treasury for Tax Analysis
“Selective excises depend on the arrogant presumption that meddlesome experts know better than consumers how they should spend their own earnings. Taxing Choice exposes the conventional rationale for discriminatory, regressive excise taxes as a faded remnant of the ideology of technocratic central planning. The distinguished authors show that excise taxes on ‘sins’ and ‘luxuries’ have little to do with genuine user fees, with raising revenues efficiently, or with contradictory textbook theories that date back fifty years. In reality, the practice of excise taxation is best explained by myopic log-rolling, pork-barrel politics. Taxing Choice provides a powerful and unique challenge to archaic academic dogma, and does so without being stuffy or complex. As a bonus, this lively book offers a surprisingly thorough and readable lesson in the politics and economics of taxation in general.”
—ALAN REYNOLDS, Director of Economic Research, Cato Institute; former Research Director, Kemp Tax Reform Commission
“There are simply no compelling economic arguments in favor of the government encouraging or discouraging personal decisions through tax policy. When government picks one special interest over another, someone always wins, and inevitably, someone always loses. Are government officials better able to make decisions than free individuals in the marketplace? Absolutely not.”
—RICHARD C. SHELBY, U. S. Senator
“Taxing Choice is a much needed book: it provides a systematic, insightful, and provocative treatment of a major fiscal instrument that gets little attention in our economy: selective excise taxes. The book makes clear that such major taxes in our economy need to be the subject of careful analysis and debate, not simply the result of the dictates of politically powerful special-interest groups.”
—WALLACE E. OATES, Professor of Economics, University of Maryland
“The use of selective taxes fits the contemporary philosophy that the route to the good social and economic order is to blueprint this good society and then use the instruments and power of government to implement the blueprint. (This contrasts sharply with that of basic liberalism—which sees the role of government to establish a stable framework or structure, within which the optimum pattern will emerge naturally as people give expression to their preferences and knowledge and creativity.) the role of selective taxes and the criteria which should guide their use—these are issues that deserve much more analysis than they have received in recent years, and that is the objective of Taxing Choice. It comes along none too soon since far more is involved here than such phrases as nuisance taxes or sin taxes might seem to imply.”
—PAUL W. McCRACKEN, former Chairman, President’s Council of Economic Advisors; Professor of Economics, Graduate School of Business Administration, University of Michigan
“Taxing Choice could hardly make its appearance at a more propitious time. Indeed, it is largely because of this intellectual effort that we actually have new tax reform legislation. However imperfect that may be when measured by the needs of the nation and the abuses of the system, it moves a good distance to at least address the political nature and social consequences of ‘fiscal discrimination’ detailed in the book.”
—IRVING LOUIS HOROWITZ, Hannah Arendt Distinguished Professor of Sociology, Rutgers University About the Editor William F. Shughart II is Senior Fellow at The Independent Institute and Professor of Economics and Finance at the University of Mississippi.
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