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While it's plausible that a government could come to depend on such revenue from undesirable acts, the act of collecting a tax from undesirable acts will decrea
by rexf 16y ago
While it's plausible that a government could come to depend on such revenue from undesirable acts, the act of collecting a tax from undesirable acts will decrease the level of activity. In short, the tax is effective. It kills two birds with one stone (less harmful activity, more tax revenue) as the article describes.
- rajat 16y agoHow? Less harmful activity, LESS tax revenue.
- Duff 16y agoThe problem is that we're pretty bad at predicting the long-term implications of discouraging consumption. Examples: Tobacco. State revenues in particularly are dependent on tobacco taxes, which were enacted under the theory that since smoking is bad for you, reducing consumption would lower heath care costs. Unfortunately, the end result is a regressive tax that gets more regressive over time as consumption drops -- without the corresponding reduction in health related costs. Real Estate. Since World War 2, we have been encouraging the development of new building of all kinds. We heavily subsidize personal mortgages, slums, and commercial/retail, both directly via cash incentives and indirectly via massive public works. Environment. We discourage activity that damages the environment, but often single out marginal activities with minimal impact. For example, New York now fines construction workers $500 each for burning scrap wood in a burn barrel for warmth, to protect society from air pollution. But it's ok to drive 70 miles to work every day.