Let’s tax the alcoholics! What’re they gonna do, stop drinking? by mattsteinglass
May 22, 2009, 6:27 pm
Filed under: Drugs, Economics

Matthew Yglesias has spent a few days blogging approvingly about raising alcohol taxes, which overall is probably a good idea. But one of the things he’s citing as a selling point, referencing Igor Volsky, is that much of the incidence of the tax would fall narrowly on a small number of very heavy drinkers. This, to me, seems like a very clear problem with the tax, not a merit. People who are drinking vastly more than the median aren’t doing it because they can afford to; they’re doing it because they have a medical and psychosocial problem. Trying to dissuade alcoholics from drinking by raising the price isn’t equitable or just, and it’s not smart policy. It’s exploitative.

More broadly, taxing behaviors we’d like to see less of is generally a good idea. But it runs into some very serious ethical issues when those behaviors are physically addictive, like gambling and drinking. One problem you can get yourself into is that the state, rather than really trying to get people to do less of the problem behavior, ends up dependent on the revenue from that behavior, and finds it’d just as soon continue bleeding that small group of disadvantaged people dry. This was to some extent the situation with alcohol taxes in the old USSR, before Yeltsin-era reforms restored equitability by ensuring that everyone was an alcoholic.


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