Sin taxes are suffering from a shortage of sinners
35 points
by hhs
3 hours ago
| 13 comments
| economist.com
| HN
neonate
2 hours ago
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alsetmusic
2 hours ago
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I worked at a liquor store when I was 21 and lived in a midwestern bible-belt state. We had flyers at the counter educating customers to vote against a raise of sin-taxes (alcohol, tobacco, possibly adult material, I don't recall) to offset a budget deficit (specifically upkeep of roads and highways).

It's not right for my vices to pay for your infrastructure. Tax tobacco to fund cancer research. Tax alcohol to advance treatment of liver disease. Tax porn to fund, I dunno, therapy for people who can't view it in moderation.

On a similar note, I do NOT have a problem with paying for schools even though I don't have kids. It raises property values and that's a benefit to me and everyone in the district. Plus, educating young people benefits society as a whole. I'm not some "don't tax me" guy because taxes are good. They just should be limited and targeted and not levied unfairly against those with bad habits for the benefit / relief of all.

That said, I apologize for quitting drinking. Research into treating cirrhosis of the liver will have to take a moderate hit and that's my fault. /s but only sorta

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amanaplanacanal
2 hours ago
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Fuel taxes should be raised to pay for road infrastructure. Align the incentives so that people can make good decisions about whether to drive or not. And shippers can make better decisions about whether to ship via rail, ship, or truck.
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mperham
2 hours ago
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EVs are breaking this funding model.

I'd suggest curbside parking should be charged everywhere. Free omnipresent parking is what has hollowed out American cities. Car storage is an awful use of public space.

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cogman10
1 hour ago
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Not yet. The biggest road destroyers are heavy vehicles which are all still fossil fuel powered.

The only part of the problem broken is that EV owners are no longer subsidizing the damage done by walmart to a road.

Raising fuel taxes is a win-win for everyone. It makes EVs more attractive and shipping garbage more expensive. It's an effective way to directly impact CO2 emissions.

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dgfitz
1 hour ago
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> The biggest road destroyers are heavy vehicles which are all still fossil fuel powered.

How does EV trucking solve weight?

It doesn’t, batteries are heavy.

Edit: are batteries not heavy?

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plorkyeran
25 minutes ago
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Nothing in the post you're responding to suggests that EV trucking would solve weight. If EV trucking did become common then the model of funding road infrastructure with fuel taxes would stop working, but that hasn't actually happened yet.
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dv_dt
1 hour ago
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Cargo trucks already break this model because damage in roads increases with the cube of weight and diesel taxes are nowhere near a power of three larger than gas taxes
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gorkish
1 hour ago
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You are woefully incorrect. in most places EV's road taxes are massively disproportionate to the amount of road tax an ICE vehicle would pay.

Here in Texas, I would ordinarily pay about $30/year in road taxes on gasoline driving a 30mpg vehicle 12,000/mi anually.

But I have an EV instead so instead I pay:

$500 in surcharge for the first year of registration and $200 surcharge for every year thereafter.

Oh whoops I misspoke; I actually have 3 EVs so despite being one person, I pay approximately 25x more road tax than the average driver here.

I'm not necessarily complaining about the /amount/ of tax but the simple fact that it is both disproportionately applied and far too low overall. The state should charge based on actual mileage, but since they just eliminated state inspections, good luck with that. Second best alternative is to make it a flat surcharge for all.

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JasserInicide
1 hour ago
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I pay approximately 25x more road tax than the average driver here.

But you're not, it's to make up for the revenue TX would get from you via the gas tax. Also EVs are heavier on average therefore do more damage to the road so paying for that too.

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Brian_K_White
8 minutes ago
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And rubber dust.
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presentation
2 hours ago
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IMO money is fungible and specifically locking in a tax to fund a specific thing seems like a good way to make the funding available for that thing volatile unless it’s so expensive that no matter what the tax pulls in it will never be enough. I doubt people would actually adjust their fuel consumption to the ideal balance between personal utility and road infrastructure funding.
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zie
1 hour ago
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It's very easy to stop funding X from the general fund and using the specific allocated money, so the overall spend on X doesn't increase at all, it's just the money now comes from the special tax, instead of the general fund.

The general fund money can then be spent on whatever again, say the mayor's sin habit ;)

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dgfitz
1 hour ago
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> It's very easy to stop funding X from the general fund

Yeah it only takes a cliche called: an act of congress

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yndoendo
1 hour ago
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I don't see a fuel tax being a vice tax since I must drive to work and the stores. I want to drive as little as possible.

Use-taxes are just to push from the collective to the average person. Instead of having companies like Amazon fit the bill for all the road damage they produce, from their delivers to their supply chains, they push it others. Rather have those companies pay their fare share and reduce the cost of fuel for the average person.

Politics play a big role in alternative transportation set backs. I would travel more if there were bullet trains between large cities. Don't like driving nor flying nor bus. There is push against alternative transportation by both the car industry and oil industry. Political donations by these help remove the chance of high-speed rail. Even though it would improve national security and service economy.

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mjevans
1 hour ago
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Road infrastructure IS civic infrastructure. It has to exist, it has to be paid for; and you'll pay for it one way or another. Any tax passed on, even indirectly, to consumers is a REGRESSIVE tax. That is, it more proportionately effects those who have no choice, who must drive, must buy food, and pay a larger percentage of their net worth / yearly gain in net worth to do those things.

Fuel taxes all funnel on to the poor the most and the middle-income as well. Who benefits from such infrastructure taxes? The rich. They still have to pay something, but far less than their share of wealth as generated by society as a whole.

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makeitdouble
1 hour ago
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Shout out to the 99pi.org podcast currently going through a "The Power Broker" run chapter by chapter. Anyone fascinated by roads, where the money goes, and how they can be/are abused is in for a treat.

https://99percentinvisible.org/club/

Roads definitely have a wide impact on communities, and who pays for them is usually critical.

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nkrisc
1 hour ago
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Higher fuel taxes just make things harder for those who have to drive to minimum wage jobs on the other side of town because that’s the only job they can get (or one of two or three they have to work). People with far higher paying jobs (probably many people reading here) could likely choose to just work from home or just pay it since it’s a far less significant proportion of their income. The rich get richer.
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Terr_
2 hours ago
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> Fuel taxes should be raised to pay for road infrastructure.

Unfortunately there's a looming issue there: "Hydrocarbons used" stops being a valid proxy for "how much you use the road" as more cars are hybrids or all-electric.

That said, those taxes did have a nice property of being imprecise enough that individual privacy was protected. I often point out to certain folks--the ones who complain that "big gubmint makes me pay for stuff I don't use"--that getting their wish means giving that same government constant and intimate knowledge of their movements and habits.

Somewhere in the middle might be a tax based on periodic odometer readings.

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whakim
1 hour ago
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It isn't really possible to link taxation to spending in this way, because there are things that cost a lot of money (say, healthcare for poor folks) which are in the public interest but no direct tax to pay for them; meanwhile there are things that raise lots of revenue (say, payroll taxes) which have no corresponding outlay.
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patrickthebold
1 hour ago
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(beside your point) but regarding schools: I always view the tax as paying back for _your_ education, yes it's shifted by a generation and not perfect (private schools, immigrants), but it's clear your aren't really "paying for other people's kids", as those kids will grow up and pay taxes themselves.
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lmm
1 hour ago
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> On a similar note, I do NOT have a problem with paying for schools even though I don't have kids. It raises property values and that's a benefit to me and everyone in the district. Plus, educating young people benefits society as a whole.

How does that logic not apply to upkeep of roads and highways? (And I say this as someone who doesn't own a car and is pretty anti-car generally).

Tax bad things (but fairly and proportionately) and spend the money on good things (and again, try to spread the benefits fairly). Money is fungible, earmarks are a pointless waste of time.

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iddan
2 hours ago
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tax porn to fund the recovery of victims of the sex industry
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bryan0
2 hours ago
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Isnt the point of "sin taxes" to offset externalities? If the externalities decrease then so should the tax. If governments are looking for a steady source of income then "sin taxing" seems like the wrong approach.
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lesuorac
2 hours ago
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I think a common argument is that it is to offset externalities but in reality I've never seen a sin tax that is based on the cost of the externality.

The tax on cigarettes is not pegged to the expenditures on COPD and other diseases and etc.

Afaik, all sin taxes go into the general coffers so they can't really be based on externalities. Plus the fuel tax doesn't even pay enough for road repair never mind any externalities (especially considering there's often no sales tax on fuel).

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akira2501
1 hour ago
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It's a signal that existing funding mechanisms are no longer capable of supporting governments demands. So governments have gotten very creative at "off label deficit spending."
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loeg
2 hours ago
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Nope, not the only point. Just adding some cost / friction to the "sin" is a goal.
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dylan604
2 hours ago
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I'm always surprised at how "little" the use of the taxes for marijuana have made an impact. Either it's being grossly managed, or there's just not as much sales from mary jane as I would have expected.
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aliasxneo
2 hours ago
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As an Oregonian, I wish I could see the benefits of it locally. We have at least a half dozen weed shops in my town, vastly outnumbering any other category of business, and yet my kids literally couldn't go to school one day last week because the district "doesn't have enough money to staff the buildings."

I know it's a bit of an unfair complaint, but these are the things I start wondering about when we can't even keep our schools open. Where is the money going?

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r14c
2 hours ago
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You can look up the state budget here: https://www.oregonlegislature.gov/lfo/Pages/Publications.asp...

Your local municipality probably has some kind of budget transparency thing that you can look at and by comparing YoY expenditures you should be able to sus out where the money is going and where its coming from. Would be cool to have some kind of queryable dataset for this process tho

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stickfigure
2 hours ago
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Maybe there isn't that much money in it? The stuff does "grow on trees" after all.

There might be lots of weed stores for the same reason antique stores and cigarette shops proliferate - they're cheap to set up.

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akira2501
1 hour ago
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There's a ton of money in it. The arbitrage is that one farmer can produce hundreds of pounds of product but cannot possibly warehouse and sell it all themselves. The resulting wholesale prices make setting up a shop that charges retail prices an incredibly reliable way to make money.

There is no mechanism, as there is in food, to support farmers or to control consumer prices. There is also no government funded free marijuana program. It seems like it would have analogs, but marijuana is truly a unique market.

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Schiendelman
1 hour ago
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As a Washingtonian - you guys just don't have that much money. Your income taxes are low.
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jojobas
1 hour ago
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Oregon weed tax revenue is mostly earmarked for addiction support spending, isn't it?
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spaceguillotine
2 hours ago
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You can view all of Washington's weed revenue https://502data.com/ $2,600,919,507 seems like a lil bit of money in tax revenue

sadly it looks like most of the current data went behind a pay wall

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frompdx
2 hours ago
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The secretary of state also publishes this data.
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0cf8612b2e1e
52 minutes ago
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A recentish Radiolab story about Oregon marijuana production: https://www.npr.org/2023/11/29/1197955821/marijuana-state-fe...

With the choice quote:

  There are just over four million people in Oregon, and so far this year, farmers have grown 8.8 million pounds of weed. Which means there's nearly a pound of dried, smokable weed for every single person in the state of Oregon. As a result, the sales price for legal marijuana in the last couple of years has plummeted.
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bunderbunder
1 hour ago
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In my state, supposedly about 1/4 of the retail price is sin tax. In dollars, that's about $400 million last year, or about $32 for every resident, or 0.7% of total state revenues.

I think I'm OK with that? If people were consuming enough cannabis to make a really sizable impact on the budget, the bulk of the effect would probably be not so much a result of increased excise taxes so much as because of plummeting income tax revenues from everyone being too stoned to hold down a job anymore.

In short, hoping for a really noticeable budgetary impact from recreational cannabis legalization is probably a "be careful what you wish for" situation.

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dgfitz
49 minutes ago
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> … being too stoned to hold down a job anymore.

Alrighty then. Wow.

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swatcoder
2 hours ago
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What scale of impact do you expect?

It's a big enough new industry that the revenues are non-trivial, but there's a lot of industry and lot of tax revenue out there already. It's not like a bunch of stoners are going to be able to provide the budget for a university system or rail network from a modest tax on their hobby.

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alphazard
1 hour ago
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A lot of people are falling for the narrative that taxation has a coherent structure, and all taxes have good reasons, or go towards good causes. It doesn't work that way.

Taxes are just a wealth transfer item that can be used as bartering chip in the collective negotiations we call politics.

One group wants something (doesn't matter what it is) but let's say cannabis legalization. Another group might have no reason to care about that, but since the status quo is illegal, might as well extract some value from the first group. Never give up something for nothing. As such, cannabis taxes are included in all of the legalization bills.

This is the important part: the reasoning comes afterwards. Cannabis will make people unproductive, it will increase car accidents, the whole place will smell like pot, etc. Those are all reasons. There's data in some form to support all of them, but none of them are the real reason, which is that it's just good business to ask for something in return, and take as much as you can get away with.

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everdrive
1 hour ago
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This is one of the main arguments I've heard against "sin taxes" -- in the ideal world, the tax revenue dries up because the behavior has been successfully disincentivized.
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AliAbdoli
2 hours ago
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Tax social media platforms' advertising money. Their current incentives of maximizing engagement is fucking everyone especially the youth.
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sien
1 hour ago
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It's surprising that the article doesn't mention Australia.

In Australia a packet of cigarettes now costs $AUD 40.

The Australian government is also banning vapes with tobacco.

There is now a substantial industry of illegal tobacco that has recently appeared.

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techfeathers
1 hour ago
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I'm curious if habits like smoking will ever make a resurgence. Seems like the rates keep going down. I can't imagine we'll ever go back to a time where smoking in restaurants or bars is normalized again.
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thrill
1 hour ago
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We'll just broaden our definitions.
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ysofunny
2 hours ago
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pity them without undrestanding the two thousand year old idea of "forgiveness from sin"

pity even more them who really believe the government is funded through taxes, not through credit

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henearkr
1 hour ago
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Reminds me of "Japan urges its young people to drink more to boost economy" (two years ago):

https://www.bbc.com/news/world-asia-62585809

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paulryanrogers
1 hour ago
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This seems like madness. Especially as more links to cancer and other trouble are being found with alcohol. Like they're literally trading young people's health to move numbers on spreadsheets.
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henearkr
43 minutes ago
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I agree totally with you.
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Molitor5901
2 hours ago
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Sin? In this economy?! /S

I disagree with the conclusions, it's not the sin that goes away it's really the opportunities to sin.

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