Thoughts on taxing what we don't like

A blog in my county, http://orangepolitics.com/2009/11/what-undesirable-items-or-activities-should-we-tax, is developing a list of stuff to tax. Examples include leaf blowers, bottled water, disposable cameras, electric billboards, mobile billboards, clothes dryers, single beers to go, grass lawns, and sodas.

I've seen only a few mobile billboards and don't like them. Here's an example:
http://www.nmbmedia.com/

And here are more thoughts:

1. Taxing what we don’t like makes sense to me. We tax tobacco, so people smoke less. That one is pretty easy for me, but some folks object to excise or sumptuary taxes generally, on the theory that they are discriminatory and regressive. See, for example, Shugart, ed., Taxing Choice (Independent Institute 1997).

2. Even if we agree to tax what we don’t like, deciding what we don’t like gets tricky. We may disagree as directly and strongly as we do on theology or the absence thereof. For instance, there’s a Dutch politician who would “force women in Muslim head scarves to pay an extra tax (for ‘pollution of the public space’).” (New Yorker of 7 December 2009, page 40). What’s disagreeable to him is her religious duty. Less starkly, some believe in a progressive income tax, while the flat taxers don’t, and they won’t convince (and probably won’t persuade) each other. There, values compete, and individuals get to have opinions.

3. Sometimes, folks get the facts wrong, and at least part of the conflict is not between values: part of the conflict is about accuracy: I cannot understand, for example, Sarah Palin’s position at http://www.facebook.com/note.php?note_id=181952698434: “A tax on national defense? I hear liberal Congressional proposals and I, like most Americans, wonder if they’re serious.” Those proposals she mentions would impose a tax to pay for national defense, not a tax “on” national defense, so I see Ms. Palin’s position as a misinterpretation. But maybe I’m missing something.

4. Some folks oppose any and all taxes. That opposition, in my opinion, results from naïveté, except for a few cases of crypto-anarchism. But those folks vote, too.

5. As for the question who decides what’s detrimental, a Constitutional republic can, should, and does sort these issues out in a predictable way, and discussion, however futile it seems, offers hope. Subjective whims or reasoned analysis (all in the eye of the beholder) prevail or lose out eventually on the basis of the electoral mechanism, however flawed.

6. Even if we reach a conclusion on what we don’t like, a big if, practicality may intrude. How would we tax leaf blowers, for instance, at the local level? (A tax on manufacturers and importers at the Federal level would work.) At retail, If Chapel Hill taxes them and Durham doesn’t, we have a nonstarter. To tax use, would we invent a mechanism of surveillance to measure duration or decibels? That’s a nonstarter, too. Or might we charge for permits, visible from the street, that allow unlimited use? That hurts my head to think about.

7. There are two categories of things we don't like: what is legal now, and things we dislike so much we’ve banned them. In Theoryland, North Carolina could impose an extra tax on and free up folks who now cannot buy wine before noon on Sunday (or call it a convenience fee): that looks like more trouble than it’s worth, probably.

8. Back in the real world, too often, instead of taxing what we don’t like, we tax what we do like. At the Federal level, we impose a direct burden on jobs through the capped portion of the FICA tax on wages. But kind of like John Prine’s grandfather, who voted for Eisenhower ‘cause Lincoln won the war, we cling to that tax because it was the best deal FDR could get for Social Security.

These thoughts are cross-posted as part of a discussion at http://orangepolitics.com/2009/11/what-undesirable-items-or-activities-should-we-tax#comment-11175.

A joke

Congress reportedly will let the estate tax expire at midnight at year's end. Now that tax joke about keeping Granddad on life support to beat the USA out of millions of dollars will come true: http://www.cnbc.com/id/34479120 has "the heads of some wealthy families wondering if relatives gathered for the holidays truly wish them a happy and healthy new year."

New taxes are needed, but the estate tax is one old one that needs to stay. Foes of big Government make some sense, but on the estate tax, my Democrats have us looking like a pitiful, helpless giant.