Comments on: Increases in taxes promotes organized crime http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/ A brown girl's perspective Mon, 08 Sep 2008 11:26:49 +0000 http://wordpress.org/?v=2.5.1 By: Richard Lorenc http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2245 Richard Lorenc Tue, 20 May 2008 21:45:46 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2245 WIRED has an interesting series of articles on 10 environmental "heresies" this week (http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_intro) . One of them has to do with carbon trading and opines that higher taxes are the way to go: http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_07trading WIRED has an interesting series of articles on 10 environmental “heresies” this week (http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_intro) . One of them has to do with carbon trading and opines that higher taxes are the way to go: http://www.wired.com/science/planetearth/magazine/16-06/ff_heresies_07trading

]]> By: classicalliberal http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2244 classicalliberal Tue, 20 May 2008 15:44:18 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2244 The problem with using the negative externalities argument to advocate a carbon tax (the fact that carbon isn't a pollutant and that we produce a very negligible amount of it aside) is that such taxes don't internalize the costs. Unless the government is using the tax revenue to construct giant carbon scrubbers throughout the country this tax does nothing to internalize the problems associated with driving; much like cigarette taxes it is a revenue device that is not really intended to address the externalities problem. The argument could be made that the revenue is used to protect or relocate coastal or other populations effected by climate change. However, this is not addressing the externalities of pollution; it is addressing the negative externality of people choosing to live in areas where nature is telling them they shouldn't live (think N.O.,LA). I am not arguing against gas taxes as such; for to the extent that the revenue goes to fund roads these taxes do a great job of internalizing costs. However, I really don't think that a carbon tax can possibly address the negative externalities problem associated with transportation. Taking money away from people and giving it to the government (the largest single polluter around--think tanks, humvees, jet fighters, Al Gore and cop cars all belching pollution vs. me and my Honda) does nothing to mitigate the amount of pollution that is produced. The problem with using the negative externalities argument to advocate a carbon tax (the fact that carbon isn’t a pollutant and that we produce a very negligible amount of it aside) is that such taxes don’t internalize the costs. Unless the government is using the tax revenue to construct giant carbon scrubbers throughout the country this tax does nothing to internalize the problems associated with driving; much like cigarette taxes it is a revenue device that is not really intended to address the externalities problem.

The argument could be made that the revenue is used to protect or relocate coastal or other populations effected by climate change. However, this is not addressing the externalities of pollution; it is addressing the negative externality of people choosing to live in areas where nature is telling them they shouldn’t live (think N.O.,LA).

I am not arguing against gas taxes as such; for to the extent that the revenue goes to fund roads these taxes do a great job of internalizing costs. However, I really don’t think that a carbon tax can possibly address the negative externalities problem associated with transportation. Taking money away from people and giving it to the government (the largest single polluter around–think tanks, humvees, jet fighters, Al Gore and cop cars all belching pollution vs. me and my Honda) does nothing to mitigate the amount of pollution that is produced.

]]> By: » Price Elasticity of Gasoline Liberty is for me… http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2229 » Price Elasticity of Gasoline Liberty is for me… Fri, 09 May 2008 00:11:22 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2229 [...] makes an excellent point in his comments to Liberty Girl’s post on the cigarette tax. He uses price elasticity to suggest I’m wrong to advocate on behalf of [...] [...] makes an excellent point in his comments to Liberty Girl’s post on the cigarette tax. He uses price elasticity to suggest I’m wrong to advocate on behalf of [...]

]]> By: Richard Lorenc http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2217 Richard Lorenc Thu, 08 May 2008 00:38:42 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2217 The mob must have pretty good lobbyists in Albany. Cigarettes are inelastic goods. That means that an increase in their price or taxes will do little to dissuade people from buying them. This extra $1.25 per pack just increases the government's smoking tax revenues by almost 100%. This simply means more programs and more spending--a dependable government revenue source. Oh, and for the record: gas is pretty inelastic too. The mob must have pretty good lobbyists in Albany.

Cigarettes are inelastic goods. That means that an increase in their price or taxes will do little to dissuade people from buying them. This extra $1.25 per pack just increases the government’s smoking tax revenues by almost 100%. This simply means more programs and more spending–a dependable government revenue source.

Oh, and for the record: gas is pretty inelastic too.

]]> By: Increases in taxes promotes organized crime | Smoking http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2213 Increases in taxes promotes organized crime | Smoking Wed, 07 May 2008 20:01:17 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2213 [...] Continue Reading [...] [...] Continue Reading [...]

]]> By: elcap http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2212 elcap Wed, 07 May 2008 17:28:47 +0000 http://libertyisforme.blogivists.com/2008/05/07/increases-in-taxes-promotes-organized-crime/#comment-2212 Pigovian taxes are quite popular nowadays, thanks in particular to Harvard economist Greg Mankiw. He argues the US should increase its tax on carbon -- note, gasoline -- because of the negative externatalities burning carbon produces. I agree with Mankiw, as do many libertarians. See Pigou Club: http://en.wikipedia.org/wiki/Pigou_Club So, why not apply this same logic to cigarettes? Right? Economics tells us to tax the bad and subsidize the good. In fact, Nicholas Kristoff has argued in his New York Times column that "One of the most successful health measures this country has ever taken was the cigarette tax." He uses this logic to advocate a tax on soda. We can extend it to a tax on Doritos, or TV, video games, etc. Is this where Greg Mankiw's logic leads? No. There is a fundamental difference between the carbon tax and the cigarette -- or sin -- tax. The carbon tax is a true Pigovian tax, meaning it corrects for negative externalties. That is, it protects innocent people from the actions of others. By contrast, a sin tax protets individuals from themselves. Libertarians -- who believe in personal responsibility as well as personal freedom -- should find no problem with endorsing a tax on gasoline while opposing a tax on cigarettes. Pigovian taxes are quite popular nowadays, thanks in particular to Harvard economist Greg Mankiw. He argues the US should increase its tax on carbon — note, gasoline — because of the negative externatalities burning carbon produces.

I agree with Mankiw, as do many libertarians. See Pigou Club: http://en.wikipedia.org/wiki/Pigou_Club

So, why not apply this same logic to cigarettes? Right? Economics tells us to tax the bad and subsidize the good.

In fact, Nicholas Kristoff has argued in his New York Times column that “One of the most successful health measures this country has ever taken was the cigarette tax.”

He uses this logic to advocate a tax on soda. We can extend it to a tax on Doritos, or TV, video games, etc.

Is this where Greg Mankiw’s logic leads?

No. There is a fundamental difference between the carbon tax and the cigarette — or sin — tax.

The carbon tax is a true Pigovian tax, meaning it corrects for negative externalties. That is, it protects innocent people from the actions of others.

By contrast, a sin tax protets individuals from themselves.

Libertarians — who believe in personal responsibility as well as personal freedom — should find no problem with endorsing a tax on gasoline while opposing a tax on cigarettes.

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