# Innovative new taxes



## Intrepid (Feb 20, 2005)

In their insatiable drive for revenue, states constantly look for new ways to tax their citizens. Three that might be interesting to watch, are on the horizon:

1. Tax on internet purchases. New York is trying to get legislation through to charge sales tax on internet purchases. As you know, if a merchant has a bricks and mortar presence in the state, customers have to pay state sales tax on internet purchases.

No retail presence, no sales tax. States see this as a huge windfall. It will probably go through, and be rapidly picked up by other states. 

Obviously, local merchants would like to cut down on net competition, and they have a voice with the legislature. Companies, like STP would seem to have little ability to persuade legislators. Some states like Ct. have a blank in the state tax return where the taxpayer is directed to enter the total of all internet purchases, and include the tax in their total payment. The year we left Ct. there was one citizen that actually complied with this requirement.

Citizens would obviously have the cost of net purchases increase by the amount of the tax, but legislators would probably count on most people not paying attention, until it is too late.

2. One that is quite innovative is moving through the legislature in Mass. The bill would impose a 2.5% tax on every educational institution in the Commonwealth that has over a billion in their endowment. 2.5% on the total endowment (I think Harvard has a $35 billion endowment, really big bucks at stake.) There are presently 19 educational institutions in Mass that would be impacted.

This would be a massive tax on institutions that rely on their endowments to cover things like financial aid, operating budgets, etc. This may have a reasonable challenge on Constitutional grounds, but that isn't a certainty.

3. The one that was in the NYT today was a proposed Calif tax on the porn and sex trade. Apparently, most of the porn comes from Calif, and has an annual revenue greater than major league baseball.

The proposed bill would impose a 25% tax on the gross revenue of any enterprise involved in the porn industry, according to the NYT. 

Stay tuned.....


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## brokencycle (Jan 11, 2008)

I don't see how a state can impose a sales tax on internet purchases. That seems to be something in the federal government's domain, what interstate trade and all. Also, you are suppose to pay sales tax on internet purchases. There is a line on your income taxes to add the amount you have purchased online, so that you can pay sales tax on it.


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## PedanticTurkey (Jan 26, 2008)

I don't know about you guys, but when I think of all the wonderful things the government does for me... like national defense, the roads, and...uh, well, hmm... surely I'm getting more for the third of my income I pay in taxes than that. I just can't think of it right now. It'll come to me, I'm sure.


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## Wayfarer (Mar 19, 2006)

Intrepid said:


> 2. One that is quite innovative is moving through the legislature in Mass. The bill would impose a 2.5% tax on every educational institution in the Commonwealth that has over a billion in their endowment. 2.5% on the total endowment (I think Harvard has a $35 billion endowment, really big bucks at stake.) There are presently 19 educational institutions in Mass that would be impacted.
> 
> This would be a massive tax on institutions that rely on their endowments to cover things like financial aid, operating budgets, etc. This may have a reasonable challenge on Constitutional grounds, but that isn't a certainty.


A not so subtle attack on private Universities. Interesting. That is basically a "wealth tax" if it is based annually on the value of the endowment vs. the endowment's income. Can you imagine having your savings account taxed annually, based on the balance?


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## PedanticTurkey (Jan 26, 2008)

I know I feel much more comfortable when the government leaves the wealthy alone and focuses on taxing productive people.


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## Relayer (Nov 9, 2005)

I see it more as an attack on the private universities non-profit status. 

In Harvard's particular case, with an endowment of $34 billion, it seems clear that their ability to operate quite well wouldn't be impacted in any way. This is money accumulated above and beyond their operating costs. 

Two points:

1) When politicians see money that can be taxed without penalty to their careers, they will begin to figure out how to make it happen.

2) Should private "non-profit", tax-free educational institutions remain tax-free if they accumulate great amounts of wealth? It seems the whole point of their non-profit/tax-free status becomes invalid. 

As I am conservative in my politics, the very word "tax" raises red flags whenever I read it... however, I'm not so sure that these endowments and the monies made by investing them should be tax free in their totality.


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## jackmccullough (May 10, 2006)

We provide institutions with tax exemptions because we judge that it is in the public interest to do so. I think I read recently that Harvard could provide free tuition to all its students without touching the principle of its endowment. It's hard to see how an institution like Harvard, with the size of the endowment it has, can justify both its nonprofit status and its continuing to charge its students the tuition it charges.


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## pt4u67 (Apr 27, 2006)

Students have the option to go to other schools! No one is forcing people to attend Harvard. 

This internet sales tax has been the state's wet dream for about 10 years. Without a brick and mortar presence it does not even seem legitimate.


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## Concordia (Sep 30, 2004)

States-- mine, anyway-- already have a use tax. Essentially, it is a sales tax on anything bought out of state. Presumably it is meant to keep local car and boat dealers from fleeing to New Hampshire.

So far, collecting has been a spotty affair, although my mother got dinged on a few artworks she had previously brought back from Canada and declared at customs.


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## Concordia (Sep 30, 2004)

Intrepid said:


> 2. One that is quite innovative is moving through the legislature in Mass. The bill would impose a 2.5% tax on every educational institution in the Commonwealth that has over a billion in their endowment. 2.5% on the total endowment (I think Harvard has a $35 billion endowment, really big bucks at stake.) There are presently 19 educational institutions in Mass that would be impacted.
> 
> This would be a massive tax on institutions that rely on their endowments to cover things like financial aid, operating budgets, etc. This may have a reasonable challenge on Constitutional grounds, but that isn't a certainty.
> .....


If this is real, it will be huge. Put in perspective, 2.5% is about half, or more, than the amount an endowment usually contributes to operating expenses. It is also over a quarter of the long-term returns one can usually expect, and perhaps it will be rationalized as an income tax on those who don't pay tax on investment income in the normal run of things. Nevertheless, it is hard to see it as anything but an attack on Harvard.


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## Kav (Jun 19, 2005)

We are still paying a luxery tax on telephones. This was initiated during hte Spanish American War to insure the building and upkeep of Spanish American War War memorials. Anyone looked at the state of our Spanish American War memorials lately?


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## Intrepid (Feb 20, 2005)

Wayfarer said:


> A not so subtle attack on private Universities. Interesting. That is basically a "wealth tax" if it is based annually on the value of the endowment vs. the endowment's income. Can you imagine having your savings account taxed annually, based on the balance?


 Good analogy about a tax on the balance in your savings account, not just the earned income.That is exactly what it is.

I'm not so sure that it is an attack on the private universities, as much as a naked grab for huge amounts of money.

The single payer health care plan that Romney put in place when he was governor has created a gigantic, unplanned for, deficit that could bankrupt the Commonwealth in about 10 years, according to the calculations of those that run the plan. That may be the motivation.

Private universities are beginning to have a problem with their endowments, when they reach a certain size. Alums are beginning to resist the annual arm twisting that wrings huge amounts of cash out of them each year. Older ones seem to go along rather placidly. The younger ones are questioning whether their money shouldn't be put toward a more worthy cause. A Harvard '83 alum wrote an op ed in the NYT to that effect Saturday. The Harvard class of '83 is sending the result of the annual class drive to a university in South Africa, or some such, rather than to Harvard.

Private foundations like Gates must may out 5% per year, by law. No such requirement on universities, at this point. Senator Grassley is holding hearings to see if this should be applied to private universities, as well.

A lot of counter currents at force here. It will be interesting to see which ones prevail.

The one that is particularly interesting is the Calif 25% proposed tax on the porn, sex related industry. 25% of GROSS REVENUE from that industry could easily erase California's deficit in a year.

If it was done creatively, it seems that they would have come up with something like 23.6% of net, or some such, to sound like they had applied some actuarial precision to the calculation.

That one could even provide a yuk or two, as we watch it develop. EG, would the cost of removing seminal fluid stains from a dress be considered a taxable event? Just wondered.....


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## Intrepid (Feb 20, 2005)

Concordia said:


> States-- mine, anyway-- already have a use tax. Essentially, it is a sales tax on anything bought out of state. Presumably it is meant to keep local car and boat dealers from fleeing to New Hampshire.
> 
> So far, collecting has been a spotty affair, although my mother got dinged on a few artworks she had previously brought back from Canada and declared at customs.


Absolutely right, on the use tax. However in NJ, the State monitors businesses, rather than individuals. The equipment that businesses buy is easy to monitor, and generates significant revenue to the State.

The State totally ignores routine individual purchases, through the net. Expensive art work would ring some bells as it came through customs, but most individuals here don't have to worry about use taxes, unless they are buying trucks, cars, etc. in Penna.


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## Wayfarer (Mar 19, 2006)

Amazing to see some comments concerning non-profits. Endowments, be they for Harvard or for a home for retired veterans, must use a conservative (accounting wise, hackles down liberals  ) formula for distribution. As Intrepid said above, 2.5% on the value of the endowment is about half of what they will pay out. Namely, an endowment should only pay out 5-6% annually to ensure the endowment continues.

Harvard has just seen unusually good returns and they have been good stewards of the funds. Instead of paying out higher percentages, they have plowed the extra returns back into the endowment. When returns get lean, and they always do, the endowment will shrink, unless they either pay out a smaller % or donors offset diminished returns.

I sit on two non-profit boards and one is about to attempt to build an endowment fund. While no specialist in the matter, I apparently understand them better than some folks above that seem to be salivating at the thought of either raping Harvard's endowment or revoking the non-profit status. What you have to understand is that proper management of *any endowment* involves not only preserving the endowment, but growing it to offset inflationary factors. I would applaud the Harvard endowment managers vs. punishing them in some manner.


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## Intrepid (Feb 20, 2005)

pt4u67 said:


> Students have the option to go to other schools! No one is forcing people to attend Harvard.
> 
> This internet sales tax has been the state's wet dream for about 10 years. Without a brick and mortar presence it does not even seem legitimate.


Second sentence is a superb point. Think back over about 10 years. Purchases over the net were of no real significance so they flew under the radar of the state tax collectors.

Look at this Forum. Many of the posts here are an exchange of ideas on net sources. Individual purchases over the net are a HUGE and growing part of our economy.

Speaking of wet dreams, you can see what legislators think of when they think of a sales tax on Amazon.com, for example.

It does get into the interstate commerce question, and the brick and mortar presence. Does the Amazon transaction take place when the customer clicks the computer in his
home state, or where the order is received by the merchant?

The stakes are gigantic, and it is hard to see how it will play out. Essentially the vendors would collect the tax and remit to states. They would rather not, but not a major issue to them. The convenience of the net is such that you probably won't drive to Borders to see if they have a book, instead of sitting in your jammies at midnight to order from Amazon, even if the Amazon transaction includes a state sales tax? Maybe not.

As in most cases, the customer will pay the tax, and not the Amazon.coms, which gets back to looking for the screwer, and the screwee. The screwee is usually the individual consumer.


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## jackmccullough (May 10, 2006)

I have to question whether there is any justification for special tax treatment of a legal industry simply based on the subject matter of the films and other publications it produces. Seems like a First Amendment violation to me.


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## PedanticTurkey (Jan 26, 2008)

Does it bother anyone else as much as it bothers me when someone suggests that, "Congress shall make no law . . . abridging the freedom of speech, or of the press" precludes the State of California from taxing pornography?

Modern constitutional law is such a joke.


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## Relayer (Nov 9, 2005)

Be it cigarettes or porn (neither of which I support), I have a problem with government trying to promote/punish any legal business through arbitrary/excessive taxation.


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## pt4u67 (Apr 27, 2006)

Relayer said:


> Be it cigarettes or porn (neither of which I support), I have a problem with government trying to promote/punish any legal business through arbitrary/excessive taxation.


+1! I've always considered the purpose of the tax code to be to generate revenue for government services. Instead what it slowly turns into is a way to socially engineer and modify behavior. Taxes on luxury and sin seems somewhat arbitrary and I have never really heard a good argument for them.


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## PedanticTurkey (Jan 26, 2008)

Whether it is or isn't a good idea is another debate.

My issue is with whether the courts should debase the Constitution and the rule of law to say that a state _can't_ tax pornography, with the absurd argument that the state is somehow "congress" and pornography is "speech."


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## Wayfarer (Mar 19, 2006)

pt4u67 said:


> Taxes on luxury and sin seems somewhat arbitrary and I have never really heard a good argument for them.


Actually, there is a good argument even I am willing to accept. Negative externalities. I am not saying I agree with all luxury or sin taxes, how and why they are implemented, etc. etc. However, I could see, say smokers paying a sin tax that will be used to reimburse the health care system for the over utilization caused by smoking, i.e. COPD, peripheral vascular disease, etc.


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## PedanticTurkey (Jan 26, 2008)

You're stumbling on the best argument against the welfare state I know of-- when the government has a vested interest in your health and your ability to take care of yourself, the government is going to try to control your behavior to make sure you don't hurt yourself.


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## pt4u67 (Apr 27, 2006)

Wayfarer said:


> Actually, there is a good argument even I am willing to accept. Negative externalities. I am not saying I agree with all luxury or sin taxes, how and why they are implemented, etc. etc. However, I could see, say smokers paying a sin tax that will be used to reimburse the health care system for the over utilization caused by smoking, i.e. COPD, peripheral vascular disease, etc.


Should we tax fast food, butter and fast cars?

There certainly may be negative social implications however how does one justify taxing it. Has it decreased the incidence of smoking or drinking? What proof do we have that the monies raised are going to the treatment of illnesses associated with those behaviors. Singling out a group to pay a "special tax" based on behaviors it simply wrong. Taxes, as much as I am opposed to them, must be assessed equally and without discrimination.

If and when that happens, the people will hold their elected representatives more accountable than now. If a minority are taxed more heavily and the majority not, then there is little the minority can do except complain. It is simply unfair and wrong.


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## Relayer (Nov 9, 2005)

PedanticTurkey said:


> You're stumbling on the best argument against the welfare state I know of-- when the government has a vested interest in your health and your ability to take care of yourself, the government is going to try to control your behavior to make sure you don't hurt yourself.


Exactly right.


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## Wayfarer (Mar 19, 2006)

pt4u67 said:


> Should we tax fast food, butter and fast cars?
> 
> There certainly may be negative social implications however how does one justify taxing it. Has it decreased the incidence of smoking or drinking?


You seem to accept the fact that market forces work, no? So if you believe in supply and demand pricing, you simply have to believe that raising taxes on certain items will affect buying behavior. For a great example of this, do you remember the 10% tax on luxury boats? It about bankrupted the industry in the US before the tax was repealed. The most basic of economic theories is people respond to incentives. If you do not think raising the price of cigarettes by $2.00 a pack will not change behavior, you pretty much do not believe in all empirical data economics has given us.



pt4u67 said:


> What proof do we have that the monies raised are going to the treatment of illnesses associated with those behaviors.


I never said the taxes were currently going for that. You are having a knee jerk reaction. I posited that a sin tax on smoking *COULD* go to off setting costs. As the current government stands, who knows where what goes to? However, you stated you have never heard of a "good argument" for sin and luxury taxes. I gave you the most reasonable of arguments. You simply do not want to accept it, which is fine. Like religion, most people only actually maintain their belief in economics when it supports their position.



pt4u67 said:


> *Singling out a group to pay a "special tax" based on behaviors it simply wrong.* Taxes, as much as I am opposed to them, must be assessed equally and without discrimination.
> 
> If and when that happens, the people will hold their elected representatives more accountable than now. If a minority are taxed more heavily and the majority not, then there is little the minority can do except complain. It is simply unfair and wrong.


Why is it wrong? You do not believe we have the ability to make choices? You do not believe that with free choice, comes responsibility? You are sounding like the most leftwing of liberals! Using taxation to control negative externalities is simple common sense IMO.

However, I did not invent all these ideas, I am merely repeating the work of minds far better than my own. If you want to take issue with some foundational aspects of modern economics, you go for it! :thumbs-up:


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> You're stumbling on the best argument against the welfare state I know of-- when the government has a vested interest in your health and your ability to take care of yourself, the government is going to try to control your behavior to make sure you don't hurt yourself.


It's official. The Interchange has become too brain dead neo-con even for me. :crazy:


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## PedanticTurkey (Jan 26, 2008)

I wouldn't characterize your response as "neo con," but it sure is brain-dead. For a lot of reasons.


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> I wouldn't characterize your response as "neo con," but it sure is brain-dead. For a lot of reasons.


No, it was your response that was both brain dead and neo con. As I stated, a sin tax to control negative externalities is hardly something invented by me. Educate yourself or not, your choice: https://en.wikipedia.org/wiki/Pigovian_tax


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## PedanticTurkey (Jan 26, 2008)

You're just so incredibly stupid-- first, in your dismissive response to a very real concern; and second, in calling it "neo con," which is utterly ridiculous and makes plain that you have no idea what a neoconservative even is.

Now, ignorance is one thing, but pair it with arrogance and it really gets on my nerves.


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> You're just so incredibly stupid-- first, in your dismissive response to a very real concern; and second, in calling it "neo con," which is utterly ridiculous and makes plain that you have no idea what a neoconservative even is.
> 
> Now, ignorance is one thing, but pair it with arrogance and it really gets on my nerves.


Ah yes, I am incredibly stupid. And of course, your most rational and cogent rebuttal of Pigovian taxes can be found exactly where? Ah yes, your argument against Pigovian taxes is non-existent (as you no doubt have never heard the term, let alone are in a position to rebut it) and instead you wish to argue over my use of the term "neo con", in reference to your knee jerk appeal to "the welfare state."

What was I thinking?


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## PedanticTurkey (Jan 26, 2008)

I don't know why I'm bothering to reply to your continued idiocy, but here goes.

First, I did not make an argument for or against taxes on externalities, but on the welfare state's turning YOUR HEALTH into such an externality, something that the government has a financial interest in controlling.

And, second, there's absolutely nothing neoconservative about my statement; in fact, my position is the antithesis of theirs. A tip for the future: when someone speaks critically of the welfare state, he's _probably_ not a neoconservative, and if you call him one for it, you're going to look like an imbecile.


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> First, I did not make an argument for or against taxes on externalities, but on the welfare state's turning YOUR HEALTH into such an externality, something that the government has a financial interest in controlling.


I see the choice you made was not to educate yourself in regards to this topic. I rather suspected that would be your choice. I think we know who is "incredibly stupid" here. Smoking and drinking are the two prime examples of individual choice/behavior that have externalities Pig taxes apply to. Again, this is nothing I can take credit for thinking up, minds much better than mine (and quite obviously yours) have written extensively on the subject.



PedanticTurkey said:


> A tip for the future: when someone speaks critically of the welfare state, he's _probably_ not a neoconservative, and if you call him one for it, you're going to look like an imbecile.


I will value that tip as if there is one thing I know for certain, you are an expert at looking like an imbecile.


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## ksinc (May 30, 2005)

The problem with these approaches is the unintended consequences. If we raise the taxes on cigarettes some will stop smoking. However, some will make other choices that will increase black market activity, tangential crimes, law enforcement, correction costs, and deaths. Outright prohibition didn't work, why would raising taxes? As in the case of liquor; prohibition gave us Ted Kennedy and rationing gave us John McCain. Can anyone calculate the unintended, uncaptured costs in that well-meaning decision? I sure can't. Leave people be. Sales taxes and property taxes should be across the board items not decision-making factors.


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## PedanticTurkey (Jan 26, 2008)

Wayfarer, you still apparently still do not understand my original comment even after I've explained it to you as I would to a child, and still you call me names.

If _anyone_ didn't already know you were a buffoon from the idiotic "neo con" attack, they do now. You're oblivious to both facts and arguments.


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## Beresford (Mar 30, 2006)

What I find interesting is that international-caliber higher education is one of the few things the Commonwealth of Massachusetts still produces. And yet they are at they point where they will cannibalize that resource to support their socialist goals.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> Actually, there is a good argument even I am willing to accept. Negative externalities. I am not saying I agree with all luxury or sin taxes, how and why they are implemented, etc. etc. *However, I could see, say smokers paying a sin tax that will be used to reimburse the health care system for the over utilization caused by smoking, i.e. COPD, peripheral vascular disease, etc.*


I agree 100%.


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## Relayer (Nov 9, 2005)

The appropriateness of the taxation issue aside, does anyone really think this tobacco tax money will actually be used to reimburse the 'health care system'? 

That government(s) is going to put that tax money aside (can you say 'lockbox'), then dole it out to doctors, hospitals, and drug companies for the treatment of destitute ailing smokers?

No. Not enough votes can be influenced in this manner to justify that for the politicians. 

No, it will remain for all intents and purposes, primarily a sin/punishment tax, little else. Just another source of money and increased power for the government.


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## brokencycle (Jan 11, 2008)

ksinc said:


> The problem with these approaches is the unintended consequences. If we raise the taxes on cigarettes some will stop smoking. However, some will make other choices that will increase black market activity, tangential crimes, law enforcement, correction costs, and deaths. Outright prohibition didn't work, why would raising taxes? As in the case of liquor; prohibition gave us Ted Kennedy and rationing gave us John McCain. Can anyone calculate the unintended, uncaptured costs in that well-meaning decision? I sure can't. Leave people be. Sales taxes and property taxes should be across the board items not decision-making factors.


That is spot on. If people want to smoke or drink - they should be allowed to: it is legal after all. If the government doesn't want people doing these things, make them illegal - don't increase taxes. It is horribly ironic that they want to fund socialized medicine (the children's insurance program) with a tax on cigarettes. Doing something in an attempt to help people's health requires others to do something that could harm them.


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## Laxplayer (Apr 26, 2006)

_For businesses it is a bottom-line calculus. Spending as much as $US900 ($990) or so to give a participant free nicotine patches and drugs to ease withdrawal, as well as phone sessions with smoking addiction counsellors, can more than offset the estimated $US16,000 or more in additional lifetime medical bills a typical smoker generates, according to US health data._
_That figure does not count the costs of absenteeism or the drain on productivity when smokers periodically duck outside for a cigarette._

_Some employers go beyond invitations to apply financial pressure to motivate people to stop smoking. This month, for example, Tribune Company, the Chicago media business, asked employees to indicate if they or family members were smokers when they signed up for the 2008 health plan. Smokers will be penalised $US100 a month unless they join a company-paid cessation program run by Free and Clear._

https://www.smh.com.au/news/business/companies-final-rites-for-smokers/2007/10/26/1192941336827.html


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## pt4u67 (Apr 27, 2006)

That taxes "could" be used for this or that is not how taxing works. Taxes raised need to be pinned to something concrete. We need "x" therefore we are going to vote to institute a tax to pay for it. Not we're going to raise your taxes and then we will figure on what to spend it on. Maybe we'll just put it in a trust fund, borrow from it to pay for pork barrel projects and leave an IOU behind which somehow we will figure out how to pay for and then....oh wait, that's social security. 

The point I am making is that by taxing certain people who are in the minority states almost guarantees that no one will fuss. People make choices, yes. Some choose to smoke and drink and others don't. Perhaps out of concern for the price of those commodities or perhaps for health reasons, I don't care. But to single out a minority based on those choices for a special tax? 

Let's for arguments sake consider that every smoker and drinker in the U.S. decided to stop based on the deterrent effect of taxing. Not withstanding the economic impact on sales, where would states make up the lost revenue. They would have to either cut services or pass the costs onto everyone else. If forced to pass along the costs citizens would hammer their state government and force a change in behavior. By taxing a minority, and under the shameful guise of social good, states are having their cake and eating it too.


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## jackmccullough (May 10, 2006)

PedanticTurkey said:


> Does it bother anyone else as much as it bothers me when someone suggests that, "Congress shall make no law . . . abridging the freedom of speech, or of the press" precludes the State of California from taxing pornography?
> 
> Modern constitutional law is such a joke.


If you knew anything about constitutional law you would know that the incorporation doctrine, founded on the 14th Amendment, applies the protections of the Bill of Rights to the states.


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## Intrepid (Feb 20, 2005)

Beresford said:


> What I find interesting is that international-caliber higher education is one of the few things the Commonwealth of Massachusetts still produces. And yet they are at they point where they will cannibalize that resource to support their socialist goals.


Good point ! However, it is unlikely that a high school diploma, or being terribly bright is a requirement for election to the Mass legislature.

What they have discovered is that the single payer health plan that Romney was going to use as a springboard to the White House has left the Commonwealth essentially bankrupt.

Unless they do something soon, they will have trouble paying debt service on their bonds, can't sell new bonds to finance other needs, and will be in desperate trouble.

This calls for immense amounts of money that can't be raised by increasing the tolls on the Mass Pike.

If higher education has to suffer, so be it. They don't have any other apparent sources.

Without exceptions, all of the elite educational institutions in the Northeast are run by far left administrations, and a far left faculty. They are doing their best to educate the next ruling class that will be socialists, and convinced that America is to blame for most of the ills in the world.

These institutions are supporters of huge tax increases on big oil, big pharma, big retail, and any individual that achieves economic success (as a former speaker of the house stated it "those that have won life's lottery.")

It will be interesting to see how enthusiastic those that run these institutions are about a large tax on "big edu".


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> Wayfarer, you still apparently still do not understand my original comment even after I've explained it to you as I would to a child, and still you call me names.
> 
> If _anyone_ didn't already know you were a buffoon from the idiotic "neo con" attack, they do now. You're oblivious to both facts and arguments.


Ah yes, I am the one oblivious to "facts and arguments." Because see, I am the one refusing to deal with the issue of the thread in an educated and reasonable manner. Because I am the one that cannot comprehend some basic economics on taxation and have to deflect off the main point to something tangential in order to ad hoc my way (unsuccessfully) to seem semi-lucid.



ksinc has come up with the classic criticism re: black markets. Then he veered off course, but at least he did it in a reasoned fashion. Sorry bud, I find Pig taxes valid, even despite the "knowledge gap" of where is the right level to modify behaviour yet not incentivize black marketeering. There is a level lower than black market motivation that will modify behaviour to a significant extent.

To others: do not conflate what is being done with taxes vs. what should be done with taxes. It is like arguing that because some things in the legal system are awry, the whole concept of a legal system is wrong. That is just shoddy thinking IMO.

Wow, this is great. I wish GMAC were here to see this. I am getting attacked not because I believe in low taxes, flat taxes, and not over taxing the wealthy, but because I am presenting a classic argument for a certain type of tax. This is so different.


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## Intrepid (Feb 20, 2005)

Kav said:


> We are still paying a luxery tax on telephones. This was initiated during hte Spanish American War to insure the building and upkeep of Spanish American War War memorials. Anyone looked at the state of our Spanish American War memorials lately?


An absolutely brilliant point! Is is instructive to see the rationale that legislators use to impose new taxes, and then to see what the taxes are actually used for. Kav cites a classic.

Consider others:
Governor Byrne had a tough sell to impose an income tax in NJ. It was finally approved because it was to be a small one and only used for education.

The tax has become gigantic, and is causing a net outflow of NJs most productive citizens. By most objective rankings, NJ public education is among the worst in the nation.

Large cigarette taxes were imposed "to cover the increased cost to the states for medicaid expenses, due to smoking related illnesses". You betcha. The taxes have gone largely to the plaintiffs attorneys that brought the suits against the tobacco companies, and then directly into the state revenue streams to cover things like bloated bureaucracries and massive pension and health benefits for state employees.

Ever been to Atlantic City? Legalized gambling was sold to NJ on the basis that it would help clean up Atlantic City that had turned into a ghetto on the shore. Thirty years later, Atlantic City is still a ghetto, and something like 5 of the last 7 Atlantic city Mayors are in prison. Ergo in Nj, you have got to realize that a portion of any tax will go to graft.

Finally the rationale put up in Calif for the tax on porn could have been written by the SNL writers.

Tax is needed to treat the increase in SDTs. Further, there are people that stay home all day long watching porn, and can't hold meaningful jobs.

Even people dumb enough to elect Maxine Waters to Congress have got to get a yuk out of this.


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## PedanticTurkey (Jan 26, 2008)

jackmccullough said:


> If you knew anything about constitutional law you would know that the incorporation doctrine, founded on the 14th Amendment, applies the protections of the Bill of Rights to the states.


Don't you mean the "concept of existence, of meaning, of the universe, and of the mystery of human life" doctrine? Or is it just something simple and straightforward like penumbras and emanations?

When you get past the horseshit, pornography is "free speech" because five judges wanted it to be legal.


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## PedanticTurkey (Jan 26, 2008)

Wayfarer said:


> Ah yes, I am the one oblivious to "facts and arguments." Because see, I am the one refusing to deal with the issue of the thread in an educated and reasonable manner. Because I am the one that cannot comprehend some basic economics on taxation and have to deflect off the main point to something tangential in order to ad hoc my way (unsuccessfully) to seem semi-lucid.


You're the one who thought that neoconservatives object fundamentally to the welfare state, which is completely false. You're the one who can't understand a simple argument, that the welfare state turns private freedoms into externalities, and insult me in your frustration.

Another tip, if you're listening: everyone can see right through you. When you make a mistake, admit it. People will appreciate your candor. But when you react like you have, you're not going to fool anyone, and you're not going to save any face. Anyone who's paying attention is going to think less of you.


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## ksinc (May 30, 2005)

Wayfarer said:


> ksinc has come up with the classic criticism re: black markets. Then he veered off course, but at least he did it in a reasoned fashion. Sorry bud, I find Pig taxes valid, even despite the "knowledge gap" of where is the right level to modify behaviour yet not incentivize black marketeering. There is a level lower than black market motivation that will modify behaviour to a significant extent.


How did I veer off course?

You only "find" that because you don't capture and count *ALL* the costs.

These taxes are designed by people that #1) don't understand economics and #2) confuse behavior modification with behavioral therapy; which *is* based on cognitive learning. Purchases are an economic and therefore cognitive decision. Smoking is an emotional more than physical addiction; therefore it is more Skinner than Pavlov. As such, external stimuli don't control behavior they merely become additional variables and/or costs of the destructive behavior.

For instance, aversion therapy (electric shock) is known to be a successful treatment for smoking, but only if it is self-administered. Do the so-called math there. :devil: Still, the relapse rate is over 50%.


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## ksinc (May 30, 2005)

brokencycle said:


> I don't see how a state can impose a sales tax on internet purchases. That seems to be something in the federal government's domain, what interstate trade and all. Also, you are suppose to pay sales tax on internet purchases. There is a line on your income taxes to add the amount you have purchased online, so that you can pay sales tax on it.


You lost me here with this one. It seems like you said you don't see how they can do it, but that they already do it. Indeed, the loop hole is anyone not filing sales tax returns (without a sales tax ID). My personal opinion is the day is coming when every individual will have to file just like every business already does. Sales tax audits can be hell. Especially for multiple-state filers.


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## jackmccullough (May 10, 2006)

PedanticTurkey said:


> Don't you mean the "concept of existence, of meaning, of the universe, and of the mystery of human life" doctrine? Or is it just something simple and straightforward like penumbras and emanations?
> 
> When you get past the horseshit, pornography is "free speech" because five judges wanted it to be legal.


No, I mean this:

No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

It's in the 14th Amendment.


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## PedanticTurkey (Jan 26, 2008)

jackmccullough said:


> No, I mean this:
> 
> No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
> 
> It's in the 14th Amendment.


Really? Would you mind repasting that and bolding the part about pornography?


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## ksinc (May 30, 2005)

The problem with applying the 14th is that these are State Incorporations, not invidividuals.


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## jackmccullough (May 10, 2006)

PedanticTurkey said:


> Really? Would you mind repasting that and bolding the part about pornography?


Would you mind explaining how pornography isn't "speech" or "the press"?


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## PedanticTurkey (Jan 26, 2008)

ksinc said:


> The problem with applying the 14th is that these are State Incorporations, not invidividuals.


Well, the real problem with the 14th amendment is that it was illegally ratified, but that's another story for another day.

I think the most important words in it are the last ones, giving _Congress_ the power to enforce the amendment's protections.

Of course the Supreme Court turned around and said, well, Congress can enforce it, but we get to say what it means (that abortion and sodomy must always be legal).


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## ksinc (May 30, 2005)

PedanticTurkey said:


> Well, the real problem with the 14th amendment is that it was illegally ratified, but that's another story for another day.


Water under the bridge.


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## PedanticTurkey (Jan 26, 2008)

jackmccullough said:


> Would you mind explaining how pornography isn't "speech" or "the press"?


What about screaming fire in a crowded theater?


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## jackmccullough (May 10, 2006)

PedanticTurkey said:


> What about screaming fire in a crowded theater?


And this relates to pornography how, exactly?


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## PedanticTurkey (Jan 26, 2008)

Because shouting "fire" is actually speech, at least? How are dirty pictures speech?


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> ...that the welfare state turns private freedoms into externalities...


What you just cannot seem to grasp is that the externalities exist regardless of whether there is a welfare state or not. The welfare state does not manufacture them as you keep insisting. You can scream it as loudly and childishly as you want, but it will not change the underlying fact.

Please carry on, I am done with you on this topic. As an aside, were you not complaining about getting banned somewhere for similar behavior?


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## ksinc (May 30, 2005)

jackmccullough said:


> Would you mind explaining how pornography isn't "speech" or "the press"?


Pornography isn't speech because it is the press.

What do I win? :icon_smile_big:


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## PedanticTurkey (Jan 26, 2008)

Wayfarer said:


> What you just cannot seem to grasp is that the externalities exist regardless of whether there is a welfare state or not. The welfare state does not manufacture them as you keep insisting. You can scream it as loudly and childishly as you want, but it will not change the underlying fact.


Oh, look at that-- you do finally evidence some understanding of my VERY FIRST POST that you insulted. I guess it would be too much for you to actually explain your position, maybe in the form of an argument instead of just a bald assertion that I'm wrong (which, of course, I'm not).

Nope, you're taking your hat and going home. Nice.



> Please carry on, I am done with you on this topic. As an aside, were you not complaining about getting banned somewhere for similar behavior?


Funny-- you started this by insulting me and calling me names without any kind of substantive response. I think my response has been measured and appropriate, but I've never responded well to being insulted. I'm sure we'd both be banned.


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## Wayfarer (Mar 19, 2006)

ksinc said:


> How did I veer off course?
> 
> You only "find" that because you don't capture and count *ALL* the costs.
> 
> ...


Two points:

1) You are conflating the theory of the tax with possible poor implementation. I am not about to argue the average legislator manages to think cogently on the subject, but that only speaks to the legislator, not the validity of the theory itself.

2) If you want to maintain Pig taxes are not valid, you have to disregard all basic economics related to supply and demand pricing. I do not think you are about to do that.

I acknowledge black market activity is a possible consequence, but still maintain there is a pricing/Nash Equilibrium that counters that. Precision is not very necessary, experimentation and/or common sense will help mitigate it.

I think we are finding out who smokers here are


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## Laxplayer (Apr 26, 2006)

PedanticTurkey said:


> Because shouting "fire" is actually speech, at least? How are dirty pictures speech?


Screaming fire in a crowded theater is not free speech, see Brandenberg v. Ohio.


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## ksinc (May 30, 2005)

Wayfarer said:


> Two points:
> 
> 1) You are conflating the theory of the tax with possible poor implementation. I am not about to argue the average legislator manages to think cogently on the subject, but that only speaks to the legislator, not the validity of the theory itself.
> 
> ...


Excuse me, but you are the one ignoring *applied* economics. In applied economics one must go the secondary stages. You are stopping at economics as presented in an introductory textbook, i.e. guns vs. butter. You are assuming you can limit the choices to A) smoke & pay the tax or B) quit smoking. You can't. Human behavior is not a zero-sum game. You are taking a liberal position that is not supported by economic realities. You are making the same type of "economic argument" as those saying raising taxes will increase government revenues. It doesn't. It lowers revenues. Cutting taxes raises revenues.

In addition, I am not arguing they are not valid because they have no effect. I'm arguing the cost:benefit and intended vs. unintended consequences. To do so honestly, one must count *ALL* the costs and *ALL* the consequences. Upon doing so, it is not economically viable. Does it have some effects? Sure. However, you are viewing them as having a positive cost:benefit solely from your perspective of healthcare costs.

I'm not shocked to find Paul doesn't object to robbing Peter twice to pay Paul once.


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## Wayfarer (Mar 19, 2006)

ksinc said:


> Excuse me, but you are the one ignoring *applied* economics. In applied economics one must go the secondary stages. You are stopping at economics as presented in an introductory textbook, i.e. guns vs. butter. You are assuming you can limit the choices to A) smoke & pay the tax or B) quit smoking. You can't. Human behavior is not a zero-sum game. *You are taking a liberal position that is not supported by economic realities. You are making the same type of "economic argument" as those saying raising taxes will increase government revenues. It doesn't. It lowers revenues. Cutting taxes raises revenues.*


Wow, I need to get a new uniform I guess. More accusations of liberal-dom.

The bolded is a faulty comparison. To maintain the comparison, you would have to maintain cutting taxes on cigarettes will make you smoke less. The are not the "same type" of argument, they are diametrically opposed. Further, I gave a nod to applied economics, stating you would need to experiment with the tax level, did I not? Further, there is actual empirical studies sin taxes do modify behavior. One study showed that raising the price of alcohol lowers teen STD rates. Think on that one, lol.



ksinc said:


> In addition, I am not arguing they are not valid because they have no effect. I'm arguing the cost:benefit and intended vs. unintended consequences. To do so honestly, one must count *ALL* the costs and *ALL* the consequences. Upon doing so, it is not economically viable. Does it have some effects? Sure. However, you are viewing them as having a positive cost:benefit solely from your perspective of healthcare costs.


I never said the health care costs savings (or self-funding) was an exhaustive list, now did I? While you are berating me for not accounting for all costs, you are trying to make out there is only one benefit. Hardly fair argumentation! Think of all the work time lost, both for illness and uncontrolled smoke breaks, etc. that smoking causes. There are more of course.

I am sorry, I do find Pig taxes as having some merit. I do not find singling certain things out to be wrong. Just like Pig taxes apply to the externality of industry polluting, I find them valid for application in self-destructive behavior that affects society as well. If someone wanted to sit in their house and smoke all day long, paying for everything independently, I would be fine with that. However, society tends to bare the costs and I think steps should be taken to mitigate that and instill some personal responsibility for one's actions. If that makes me a liberal, so be it I guess. My, how the worm has turned


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## PedanticTurkey (Jan 26, 2008)

Can you believe this guy? He went from calling me names to adopting my argument in a matter of hours!

I just wish he'd be honest about it.


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## ksinc (May 30, 2005)

Wayfarer said:


> If that makes me a liberal, so be it I guess. My, how the worm has turned


What I said was: It is a liberal position and it is. You really think looking to government to solve a problem via tax increases is a Conservative position? Perhaps you can argue whether it might be a good idea or a bad idea, but it's certainly a liberal idea. If it's "so-be-it" why are you arguing it's not for 3 pages? Quit acting like Frank! 

FWIW, your responses to my economic arguments were incorrect and your characterization of the limits was based on your proposition, but that's your own issue to solve not mine.


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## ksinc (May 30, 2005)

Wayfarer said:


> One study showed that raising the price of alcohol lowers teen STD rates. Think on that one, lol.


This is just more of the same zero-sum game theory.

Maybe the study did find that it lowered STD rates, but what did it raise?

"TNSTAAFL."


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## ksinc (May 30, 2005)

Wayfarer said:


> I am sorry, I do find Pig taxes as having some merit. I do not find singling certain things out to be wrong. Just like Pig taxes apply to the externality of industry polluting, I find them valid for application in self-destructive behavior that affects society as well.


Again, you are conveniently stopping at the first stage. Do they have an effect? Yes. Does that mean they have merit? No. You are stopping at effect and declaring merit. They may have merit; or they may not. They certainly may benefit one group.

You are correct that price does not shift supply:demand curves it moves along them. However, that alone cannot be extrapolated into a change in behavior resulting in a positive cost:benefit.

This is the difference between basic economics and applied economics; and unfortunately you are missing it.



> Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousand fold by a factor that is insignificant in, say, physics, mathematics or medicine-the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit every- body, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.
> *In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences. *


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## Wayfarer (Mar 19, 2006)

PedanticTurkey said:


> Can you believe this guy? He went from calling me names to adopting my argument in a matter of hours!
> 
> I just wish he'd be honest about it.


Pedantic, you would not know honest if it sunk its teeth six inches deep into your brain cavity...more commonly known as your rump. :teacha:


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## Wayfarer (Mar 19, 2006)

ksinc said:


> Again, you are conveniently stopping at the first stage. Do they have an effect? Yes. Does that mean they have merit? No. You are stopping at effect and declaring merit. They may have merit; or they may not. They certainly may benefit one group.


Your quoted text:



> Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousand fold by a factor that is insignificant in, say, physics, mathematics or medicine-the special pleading of selfish interests. *While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit every- body, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently.* It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.
> 
> In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.


I think the bolded group referred to in this example, is smokers. Notice this quote applies to the logic of one group, and one group only, not society in general. You are defending the self-interests of this one group, and as your own quote indicates, it will come out with "endless pleadings of self-interest", indeed even "hire the best buyable minds to devote their whole time to presenting its case."

I agree with your quote. In the current example under discussion, the "one group", smokers, are presenting endless arguments of self-interest. By not dealing with the negative externalities of smoking, this one group's interests are a burden on all groups, i.e. society. Great quote!


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## ksinc (May 30, 2005)

Wayfarer said:


> Your quoted text:
> 
> I think the bolded group referred to in this example, is smokers. Notice this quote applies to the logic of one group, and one group only, not society in general. You are defending the self-interests of this one group, and as your own quote indicates, it will come out with "endless pleadings of self-interest", indeed even "hire the best buyable minds to devote their whole time to presenting its case."
> 
> I agree with your quote. In the current example under discussion, the "one group", smokers, are presenting endless arguments of self-interest. By not dealing with the negative externalities of smoking, this one group's interests are a burden on all groups, i.e. society. Great quote!


Ok, I can LOL at that, but the problem is not the smokers it's those unwilling to let smokers die for their own choice.

Yes, Hayek is "the man."

However, now apply that quote to the healthcare execs "argu[ing] persistently" for sin taxes and not just the smokers.


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## Wayfarer (Mar 19, 2006)

ksinc said:


> Ok, I can LOL at that, but the problem is not the smokers it's those unwilling to let smokers die for their own choice.


I am willing to let them die. We can even make them quite comfortable for a very low price 

I agree, society can be held accountable for not allowing them to just die. But we do live in a society, which is better than the state of nature, short, cruel and brutal, all that. Even Fred would agree to that I think. And yes, he is the man. I was just thinking about cracking out my The Road to Serfdom last week for some reason.

And as to health care execs? Hey, we get paid to take care of sick people. COPD'ers are extremely high utilizers. If I was arguing from self interest, I would be lobbying for cigarette purchases by consumers to subsidized


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## ksinc (May 30, 2005)

Wayfarer said:


> And as to health care execs? Hey, we get paid to take care of sick people. COPD'ers are extremely high utilizers. If I was arguing from self interest, I would be lobbying for cigarette purchases by consumers to *subsidized*


Uh, you are; that's where the taxes go. These are alway targeted transfer payments. See: tobacco settlement. Did you think that money would be spent on "Mexican Nationalism Education Programs?"


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## ksinc (May 30, 2005)

Wayfarer said:


> Further, there is actual empirical studies sin taxes do modify behavior. One study showed that raising the price of alcohol lowers teen STD rates. Think on that one, lol.


"TNSTAAFL."

https://www.iht.com/articles/2008/05/27/healthscience/27well.php


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## Wayfarer (Mar 19, 2006)

ksinc said:


> "TNSTAAFL."
> 
> https://www.iht.com/articles/2008/05/27/healthscience/27well.php


LOL. Good find.


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