With government at every level desperately seeking more revenue to cope with soaring deficits, citizens should evaluate all tax proposals according to two crucial principles: It's better to tax choices than necessities, and bad choices deserve taxation more than good choices. For one thing, these distinctions will help resolve raging debates over efforts to impose new costs on sugary soda, bottled water, candy, tanning salons and other indulgences.
Of course, tea party supporters and other conservatives are right to resist all governmental attempts to spend more money, and to make the point that local, state and federal governments shouldn't get the public to pay more, but force bureaucrats to spend less.But even with radical spending cuts, free-market advocates understand the urgent need for tax restructuring, and in that context, it makes sense to apply the bad-choices-versus-necessities standard to any potential tax plans.
For instance, most people rightly recoil at the idea of taxing basic foodstuffs, which everyone needs, but grudgingly accept taxes on cigarettes and booze, which represent personal choices of dubious value. If you strongly prefer to avoid paying extra money to the government, you can give up your drinking or smoking habits, but you can't give up your habit of regularly consuming a certain amount of nutritious food.
While taxing choices always counts as preferable to taxing necessities, it's also appropriate to draw distinctions between good choices and bad choices. For instance, giving to charity or setting aside income for retirement may not constitute necessities, but those choices bring individual and public benefits and so receive privileged treatment by the tax system. But the choice to consume soda and candy deserves no such protection from taxation. Despite the claims of soft drink manufacturers, there are no known benefits to consumption of their products, and no one needs to guzzle Coke or Sierra Mist.
Government appropriately considers public health issues with its special taxes on tobacco and booze, and scientific evidence on the destructive impact of soda and other high-calorie/low-nutrition snacks is nearly as solid as research on tobacco's costs. With government assuming bigger shares of the public's medical bills, it makes sense to tax unhealthful habits to help pay for the damage they cause.
For policy makers, taxing bad choices isn't a meddling matter of deciding what's best for each individual as much as it's a question of considering the broader social impact of personal choices. The public costs of a populace that is alcoholic, tobacco addicted and increasingly obese are too obvious to deny.