Jonathan Gruber on Sin Taxes
By David Henderson
I found an interesting article on sin taxes written by MIT economist Jonathan Gruber. It’s titled “Taxing Sin to Modify Behavior and Raise Revenue.” When I want an article for my class on Cost/Benefit Analysis that is written by someone on the “other side,” that is, someone who trusts government to impose the right taxes, I’ll consider using this piece; there’s a lot packed into a short space. In that lot are both evidence and economic analysis. It’s also a good example of someone who wants the government to save us from ourselves, that is, make decisions for those of us who would otherwise make bad decisions. So it has reasoning both about externalities and about coercive paternalism.
The article is short–only 2 pages–and so I won’t quote from it.
I will, however, raise a question. In one paragraph, under the heading “The Case of Cigarettes,” Gruber writes:
Most studies conclude that the social costs of smoking are relatively small and likely less than existing taxes on cigarettes, although controversy remains over the social costs of second-hand smoke. The relatively low social costs can be attributed to the “death benefit”: smokers live long enough to contribute to Social Security and Medicare but not long enough to collect benefits.
Later in the piece, Gruber writes:
Within 50 years, obesity is expected to shorten the average life span by at least two to five years. Thus, a large government role in addressing obesity could be justified on the grounds of reducing societal costs and mitigating self harm.
He then writes:
Ultimately, what may be needed to address the obesity problem are direct taxes on body weight.
Question for Econlog readers: Do you notice anything inconsistent? If you choose to answer, then, as my co-blogger Bryan Caplan says, “Show your work.”