Bad Economy Good Excuse to Eliminate "Vice" Taxes
The Economist hits the nail on the head — albeit a nail that has been well hit by many in the free market movement already. In the latest issue, they correctly observe that an ailing economy presents a golden opportunity to roll back economic restrictions and increase liberty. Whether it’s gambling, alcohol, or another “sin” product or service, the case for easing restrictions on the sale and consumption of these “vices” is very tempting, in particular if the case can be made that such changes will increase potential tax revenue and/or create jobs.
As those who follow my weekly “Alcohol Regulation Roundup” series may have noticed, the “good” news has increased with each passing month. Southern states are trying to make it easier for brewers to operate, Northeastern states are increasing the hours and days liquor stores can operate, and dozens of states are considering privatizing state-run alcohol distribution or sales. It isn’t just alcohol; gambling is a booming industry in more and more states. Some are increasing the places allowed to offer slots and another dozen states are considering legislation to legalize online gambling, casinos, or slots. We’ve even seen some smoking bans overturned! But with the economy heading towards a much needed recovery, there’s still a lot more work to do. As noted in the Economist article:
…despite all these initiatives, many parts of America are still lumbered with a bizarre and complex array of restrictions on drinking, gambling and the like that seem entirely out of keeping with a country that proudly calls itself the land of the free. Even after Washington leaves the club, 17 states will still maintain a government monopoly on either the sale or distribution of spirits, or both …There are over 4,000 state and federal laws concerning alcohol, says Mr Coleman of DISCUS, and another 1,900 were proposed in 2008 alone. Rules about gambling are an equally perverse mix. Only 12 states have no casinos of any sort. But several more allow them only on boats or at racetracks. Another 12 limit gambling to Indian reservations. And four states still ban fireworks of all kinds.
Yes, this expansion of liberty is the silver lining of a terribly rough economic depression. And it’s a silver lining that very likely will last into the economic recovery. Sure, with more people back to work and fewer complaining there will be a smaller number of legislators keen on expanding alcohol or gambling in their state. However, the work done by state-based and national groups such as DISCUS, The Brewers Association, Free The Hops, OpenTheTaps, CEI, The Mackinac Center for Public Policy, The Commonwealth Foundation, the Washington Policy Center, and many others will not be forgotten. We have shown that people want more freedom, choices, and better service. We have shown that liberty really does increase wealth, and enlightened many lawmakers to the idea of free market enterprise. So long as we keep chipping away at the roadblocks, we can continue to increase consumer and business freedom — regardless of the economic atmosphere.