Monday, September 16, 2013

Loving the Sinner AND the Revenue

Whenever you hear someone complain that a legislative proposal is a “sin tax” and an attempt to “legislate morality,” you can take that as code for, “I don’t have a real case against this tax proposal, so I will use this fall-back argument.” It’s the last-resort argument that requires no reasoning. Sadly, it usually works.

The Joint Revenue Committee is contemplating a rise in the tax on beer, to help pay for substance abuse programs. The current tax is minimal – 2 cents per gallon, unchanged in 80 years. The national average is 28 cents per gallon. The cost to microbreweries would be less than $100 per year, according to liquor dealers. The reason for raising the revenue is fiscal, not punitive. No one hates beer or beer-drinkers. So when you hear opponents raise the thin objection to “sin taxes,” you suspect they don’t have much else to say.

Something similar happened in the 2013 session with the cigarette tax proposal. The purpose was, in fact, was to raise the price of a pack of cigarettes to a point that it would affect sales. It would stop kids from starting to smoke and urge smokers to quit. The tax revenue would be applied to substance abuse programs. This also had a strong financial component: lower smoking rates would save Wyoming taxpayers millions of dollars that are spent on smoking-related illnesses and deaths.

So the tobacco tax was going to yield improved health AND save tax dollars. In fact, actuaries had just issued figures on how much health insurance premiums could be raised to pay for all the health care costs associated with smoking. No moralizing– just the financial realities. Tax supporters had empirical evidence that raising cigarette prices decreases use. They had solid evidence how much smoking was costing the state – in human and financial terms. Not a word against smokers.

Predictably, tobacco representatives dusted off the old reliable claim that the tax was intended to impose moral behavior on poor, beleaguered smokers. They took umbrage, harangued against the phantom moralists and were outraged! It didn’t matter that the “moral” argument had never been made. I thought any seasoned legislator could see through that. First of all, legislators legislate morality all the time. Second, in this case it was an obvious distraction from the actual arguments.

The reason lobbyists use the “sin tax” and “legislate morality” arguments? Amazingly, they continue to be an effective way to distract and short-circuit forthright debate. And maybe some lawmakers appreciate the chance to duck the hard questions. Look for these old friends in 2014 if the beer tax proposal is introduced in the Wyoming Legislature. What are the odds?