You wanna be taxin' somethin', you got to be taxin' somethin'
Last night, on his nationally syndicated talk show, Hugh Hewitt twice heartily endorsed Minnesota's new "health impact fee" (read tax) on tobacco, which helped seal the budget deal and end the state government "shutdown." First, with Minnesota Governor Tim Pawlenty where Hugh said:
You know, I actually have no problem with that. I don't care what the anti-tax hard core says, I believe in taxing the heck out of cigarettes because of externalities and [unintelligible]. It's good economics.
It is? Looks like Hugh knows about as much about good economics as he does wine. Or hockey. Or music. Or...
Well, you get the idea. Let's see what someone with a bit more of a background in the field has to say:
Third, this notion that the externalities are so large from smoking has been disputed. David [Strom] has been citing Kip Viscusi's analysis, which argues that states are compensated for medical and nursing home costs from smoking already. There's a benefit to smokers dying younger -- they don't burden Social Security, they don't linger in hospitals in their 90s by and large. Cruel logic, sure -- they don't call us the 'dismal science' for nothing! -- but if you are going to add up all the external costs, you need to also add up the external benefits of reduced longevity.
Actually that is just one of four solid points that King Banaian makes to refute the arguments of Hugh and Governor Pawlenty that the "health impact fee" was the right way to resolve the budget dilemma. Read them all.
Hugh crowed a second time later in the show when he brought James Lileks on. After getting Lileks to concede that taxing cigarettes was a good and noble idea, Hugh uncorked this whopper:
I mean, it's a normal ... you got to tax something, tax smoke!
Not only is raising taxes "normal", we really have no choice because, according to Hugh, "you got to tax something." We do? Why exactly is raising taxes the only possible solution? God forbid if we could possibly have gotten by without increasing spending as much as we did. What would happen to the schools if we didn't pour an additional $800 some million dollars into them? A cynic might ask exactly what this additional educational largesse is really going to get us, but it's all "about the children" so it would be rude and unseemly to demand to see reforms or results, wouldn't it?
I'm trying to think of what other things it would be "normal" to tax at higher rates. You know, things that are voluntary and may have negative externalities. Things like, well I don't know, maybe snack foods. How about a Cheeto tax Hugh? Or a Diet Coke tax? A Docker's tax? The burden would fall chiefly on white, middle-aged men, so why not? How about a tax on crappy folk music? Talk about negative externalities.
Well, that's the end of my feet stomping. Excuse me while I run away and read my Ayn Rand again.