Paul L. Caron
Dean




Tuesday, March 3, 2009

Filler: Taxing (and Encouraging) Vice

Dan Filler (Drexel) asks: Does Taxation Creat A One-Way Ratchet For Relaxing Vice Laws?:

The New York Times reported yesterday about how legislators are thinking up various tax schemes to raise revenue. Tom Ammiano, a city councilman in San Francisco ... would like to legalize reefer and tax it. Meanwhile, Nevada State Senator Bob Coffin is proposing to tax the state's legal brothels -- and he's finding that the operators support the tariff. That might seem surprising, but Coffin has a very plausible explanation: “I think they figure if they become part of the tax stream, the less vulnerable they will be to some shift in mores."

This is hardly a revelation, but one of the best ways to solidify legalization of vice offenses is to install them as tax revenue sources. ... Soon, people get very comfortable with this previously criminal conduct. It's not hurting average suburbanites and they appreciate the reduced tuition. When the morality crusaders come surging back, they discover that voters are still somewhat agnostic about the behavior -- but they sure as shootin' aren't going to give up the tax revenue.

Yet another piece of evidence that, at the end of the day, most social change happens in the domain of tax law.

See also Jim Maule (Villanova), Tax and the Seven Deadly Sins.

https://taxprof.typepad.com/taxprof_blog/2009/03/filler-taxing-and-encouraging-vice.html

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Comments

Interesting. The "Could you legalize it and tax it?" test should apply to lots of criminal behavior, because the only time it's sustainable is when you're dealing with a value-creating transaction.

Posted by: TaxRascal | Mar 3, 2009 7:57:18 AM