Why Not Tax Thin Nonsmokers?

Jacob Sullum | May 26, 2009

New York Times economics columnist David Leonhardt complains that the tax code is "complex in all the wrong ways," with "layer upon layer of subsidies, deductions, exemptions and extra taxes that serve no good purpose." His solution: make the tax code more intrusive by punishing people for unhealthy habits. He suggests the proposed federal soft drink tax, aimed not just at paying for health care but at discouraging overconsumption of calories and thereby curbing obesity, would be a step in the right direction, one of various possible "Pigovian taxes" on "activities that place a cost on the rest of society." He says "tobacco taxes have become the shining example" in this category.

Leaving aside the question of whether a soda tax would have a significant impact on total calorie intake, there are a couple of problems with Leonhardt's reasoning. First, smoking and overeating (unlike, say, air or water pollution) do not inherently "place a cost on the rest of society"; if taxpayers pick up the tab for the treatment of smoking- or obesity-related diseases, that is only because the government forces them to do so. Second, even if government-funded health care is taken for granted, both smoking and overeating actually seem to save taxpayers money. A 2008 Dutch study, for example, found that thin nonsmokers generate higher lifetime medical costs than obese people or smokers do because they tend to live longer. "The underlying mechanism," the researchers explained, "is that there is a substitution of inexpensive, lethal diseases toward less lethal, and therefore more costly, diseases." If the aim is to reduce government spending on medical care, New Jersey's tax on health club memberships, which Leonhardt cites as an example of "taxes that seem to defy all reason," probably makes more sense than a soda tax.

Comments

JB|5.26.09 @ 6:28PM|#

Liberals are retarded.

I saw we tax those fuckers at a higher rate. Their existence sure is bad for my health.

|5.26.09 @ 6:29PM|#

Well, a tax on stupidity would rake in trillions.

BeesInTheBrain|5.26.09 @ 6:35PM|#

Humorous. Next up taxes based on BMI.

mark|5.26.09 @ 6:38PM|#

It seems that complexity is here to stay, so the best bet for freedom has got to be the Balanced Budget Amendment. This is the third time I have mentioned it in as many days, so I'll take a break. But I bring it up again, because once you concede that government will always find new ways to tax you, a more reasonable goal for libertarians would be to hold politicians' feet to the fire when they propose new spending programs. As it is, the government is printing/borrowing money in lieu of taxing, even though we're going to pay for it either way. A Balanced Budget Amendment would eliminate this problem.

Warty|5.26.09 @ 6:38PM|#

Let's tax food, and use the revenue to expand food stamp programs.

Mister DNA|5.26.09 @ 6:51PM|#

The was a pro-soda tax opinion piece in today's local paper (the column can be found here). Plenty of "it's for the children" rhetoric, but not mention of the word "parent".

The author even claims, "The science is on the side of the tax.", yet he does not mention that our tax dollars already go to corn farmers to keep the price of High Fructose Corn Syrup artificially cheap.

|5.26.09 @ 6:55PM|#

What if we tax "thingy"?

|5.26.09 @ 7:02PM|#

A balanced budget requirement closes the door on borrowing and inflating, but leaves it open for taxation. In actual practice balanced budget requirements lead to higher taxes.

What we need instead is a constitutional limitation on spending.

Cal Lipigian|5.26.09 @ 7:08PM|#

What we need instead is a constitutional limitation on spending.

Yes, because one thing the government is known for is staying within its constitutional limitations.

Orednod|5.26.09 @ 7:20PM|#

Tax the childless. In general they use more government resources than older people with children, and aren't doing their part to keep the welfare state alive.

|5.26.09 @ 7:21PM|#

How is smoking not air pollution? Yes, I know tobacco taxes, etc. are often predicated on taxpayers's future payments of health care costs of smokers, but smoking is definitely air pollution.

Next on the tax/ban list: outdoor charcoal barbecues, again for both reasons. Imagine the grant potential for researching the effects of secondhand barbecue smoke!

|5.26.09 @ 7:23PM|#

First, smoking and overeating (unlike, say, air or water pollution) do not inherently "place a cost on the rest of society"

Everything places a cost on the rest of society. We're all interconnected!

|5.26.09 @ 8:00PM|#

"The underlying mechanism," the researchers explained, "is that there is a substitution of inexpensive, lethal diseases toward less lethal, and therefore more costly, diseases."

This is incredibly cold reasoning, but it seems correct. Not something I'd want my name attached to, though.

Warty|5.26.09 @ 8:12PM|#

Fuck it, I'm gonna hide in a cave for the next 20 years and listen to Unknown Hinson records. You fuckheads better have fixed things by the time I come back out.

|5.26.09 @ 8:15PM|#

Hey Joel H. -- we're way ahead of you on Long Island.

http://www.newsday.com/news/local/suffolk/ny-lihunt2112787521may25,0,4011594.story

PETE|5.26.09 @ 8:20PM|#

1) Leonhardt has obviously never been to the Jerz or he wouldn't make such an outlandish statement. If they called it a "Douchebag Guido Meathead" tax instead of a health club tax, it would probably strike him as more palatable. If I were the state governor, I would levy similar taxes on fake tanner, hair gel and UFC pay-per-view events, as overconsumption of those products also harms the average non-New Jersian's view of the state, and probably discourages investment and tourism.

2) "if taxpayers pick up the tab for the treatment of smoking- or obesity-related diseases, that is only because the government forces them to do so." Ummmmm. Through the E.R., sure. But taxpayers incur these costs in other ways as well. Everything from the higher cost of care and insurance - for those who pay for such things - to the inconvenience of sitting next to a fatass on a cross-country flight. Fat people and smokers crowding the ERs is the least of the average ER's problems, however.

martin|5.26.09 @ 8:21PM|#

Why stop with a soda tax?
Isn't it in the greater interest of society that older, sicker, less productive people not be a drain on resources?
Away with those touchy-feely tax subsidies for the old, cut research to prolong life!
What the old boomers are still in the majority? Damn, got to wait until they die off.

I'm still making it up. But I'm certain that the new health-care-for-all program will contain some unwritten policies discouraging "heroic measures" to keep the old from dying. Just like they do in some of Europe. It's natural, the arrogance of youth.

|5.26.09 @ 8:27PM|#

If they called it a "Douchebag Guido Meathead" tax instead of a health club tax

PETE, this is my new haircut.

BakedPenguin|5.26.09 @ 8:43PM|#

What if we tax "thingy"?

Well, it would make chartered accountancy more interesting.

|5.26.09 @ 8:57PM|#

How about we tax people who believe in spending all of our money? They're the problem, anyway.

PETE|5.26.09 @ 9:10PM|#

3) The whole idea of vice taxes, from what little I've read, is fucking dumb. Just like most fiscal policy moves, they're predicated more on political viability than economic virtue. "We need to raise money for X. Let's tax something. How about cigarettes? People hate those!!"

|5.26.09 @ 10:11PM|#

New York Times economics columnist David Leonhardt complains that the tax code is "complex in all the wrong ways,"

So, let's make it complex in even more wrong ways.

I suppose if I don't supress the urge to strangle the stupid out of this columnist, he'll propose to tax that too.

|5.26.09 @ 11:44PM|#

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johnny john john|5.27.09 @ 12:18AM|#

I see nothing wrong with a soda tax, like I see nothing wrong with an alcohol tax or a cigarette tax.

Soft drinks really have little to no health benefits. Bad for your teeth, high energy content but little nutritional value - just like any highly refined/processed food.

What's so wrong about increasing life expectancy and quality of life? You measure the expense in in lifetime medical costs, but what are the yearly costs? How much "productivity" is gained by living longer? I see no problem with America producing more healthy, attractive people.

And a soda tax is not very complicated... it's just as it is, a tax on soda... relatively easy to explain in comparison to other tax laws...

|5.27.09 @ 12:19AM|#

Yes, because one thing the government is known for is staying within its constitutional limitations.

I see only three options:

1) Give up. The government is going to ride roughshod over you. Nothing you can do will change it. So lube up and and grab your ankles.

2) Revolt. You think we're at the tipping point yet? If so, start an anarchist revolution. Better hope you're right though, because it will be awful embarassing if no one else shows up for the rebellion.

3) Try to limit government. Yeah, it's naive. But we actually have recorded historical instances of governments briefly honoring the limitations set on them. Maybe we can slow the juggernaut down just enough that we can get some more people on board for option number two.

johnny john john|5.27.09 @ 12:28AM|#

Brandybuck:

The revolt isn't happening. Americans are too apathetic about revolt because, honestly, things are just too good for the majority of people to really care. When people start starving and dying, that's when people revolt. People don't revolt over a soda tax.

|5.27.09 @ 12:38AM|#

People don't revolt over a soda tax.

The American Revolution started over a tax on tea.

Not that there weren't other things going on, but it was sort of a 'last straw' situation.

Watch what happens when our current defecit spending binge comes home to roost. We'll have mass inflation, which may not mean starvation, but it will mean a lot of pissed off people, generally lower living standards.

Then the social security fund will hit a wall, and we'll have more defecit spending, more inflation, and a political crisis as baby boomers come right up against younger generations in a fight over what to do about it.

Count on the boomers fighting tooth and nail to raise taxes to cover, and everyone else in an uproar. The boomers will be demanding tax hikes on top of the mass inflation / economic depression.

What this shit hits the fan it won't be pretty.

Chad|5.27.09 @ 12:44AM|#

Actually, I am willing to bet that "thin non-smokers" already pay more in taxes on average than those who fall under any other combination of the two variables.

Joel H | May 26, 2009, 7:21pm | #

How is smoking not air pollution? Yes, I know tobacco taxes, etc. are often predicated on taxpayers's future payments of health care costs of smokers, but smoking is definitely air pollution.

It most definitely IS air pollution, I agree. But the evidence also indicates that it is very weak air pollution - so weak that we can't even conclusively measure it in anyone who isn't constantly (and voluntarily) bathed in second-hand-smoke, like bartenders and smokers' spouses. Even then, the effect is small...something along the lines of a 30% increase in certain cancer risks, as opposed to a ~900% increase for heavy smokers. The effect of "casual" SHS is too small to measure, but if one assumes the exposure vs risk is linear, one might conclude that just a few percent of even the most smoke-sensitive cancers, such as breast cancers, are caused by casual SHS.

The problem with the "SHS is pollution, and therefore should be taxed" argument is not a qualitative failure, but rather an quantitative one. What the data suggests is a tax of a few cents per pack, not a few dollars. As with all externalities, A tax is justified, but not ANY tax.

Mike|5.27.09 @ 12:54AM|#

"I see no problem with America producing more healthy, attractive people. "

I agree, so let's give tax breaks to attractive people when they have children. After all, it's a positive externality since we all like looking at hot people. An extra bonus should be given to attractive people who are sexually uninhibited.

|5.27.09 @ 1:56AM|#

Holy shit. Did Chad just say something vaguely libertarian?

Apocalypse|5.27.09 @ 2:19AM|#

Is it just me, or is Chad HnR's own Brainy Smurf? To paraphrase Ned Flanders: "...[Brainy Smurf], the answer to a question nobody asked!"

Makes sense to me, since these little blue beings lived in a Kiddie Kollectivist Kartoon, disdained the use of money, and relied on some ancient autocratic oligarch providing leadership through hocus pocus (not too far from Keynesian economics, incidentally). Also, there were 99 of these guys and only one female, who never never gestated (Kiddie Feminism) thus ensuring no drain on the collective's (Smurf Village's) resources.

Factoring in the Smurfs' supposed affinity with the enviroment (Mother Nature = Gaia)and Chad's rabid prosletyzing of such hoaxes as AGW and statism (tax all, except good liberals), I doubt very seriously Chad would donate one of his own smurfberries to these schemes he rountinely espouses.

Let's hope Chad is neither attractive nor sexually uninhibited so the likelihood of passing on these asinine ideas is nill. Since Smurfette was "liberated" and rebuffed all suitors, this seems ensured.

P.S. Don't forget to toss him on his smug, self-important head! He can rely on collectivist health care!

Gilbert Martin|5.27.09 @ 8:19AM|#

"; if taxpayers pick up the tab for the treatment of smoking- or obesity-related diseases, that is only because the government forces them to do so"

Exactly - governmnent is the entity that is forcing taxpayers to subsidize the healthcare of others.

This reminds me of the liberals claims about Wal-Mart - that the compnay is being "subsidized" by the taxpayers because it doesn't provide "good enough" healthcare benefits and some of it's employees are on government welfare programs. Well no, Wal-Mart wasn't the entity that decided to create those government welfare programs to begin with.

And of course government meddling begats more government meddling. As we see with all these nanny-state taxing schemes. Once government decides to get in the business of paying for people's health care (despite having no legitimate Constitutional authority whatsoever to do so), it can use that as leverage to start meddling in all sorts of personal behavior using the excuse that those activites are "costing" the taxpayers.

Gilbert Martin|5.27.09 @ 8:25AM|#

"Then the social security fund will hit a wall, "

Yep - and Medicare, Medicaid and collecively all the state defined-benefit pension programs will hit the wall as well and big an even bigger problem that Social Security will.

It goes to show that the very creation of the notion of something being an "entitlement" was the epitome of irresponsibility to begin with.

dhex|5.27.09 @ 9:01AM|#

i'm all for a guido tax. hell, i'm for a guido extraordinary rendition (we'll tell them they're flying to south beach).

Xeones|5.27.09 @ 9:19AM|#

(we'll tell them they're flying to south beach)

Gitmo has beaches, and it's south of Jersey. They wouldn't notice anyway -- too much 'roid-and-product-induced brain damage.

Fuck taxes on non-guidos, though, yo.

Chad|5.27.09 @ 10:03AM|#

Factoring in the Smurfs' supposed affinity with the enviroment (Mother Nature = Gaia)and Chad's rabid prosletyzing of such hoaxes as AGW and statism (tax all, except good liberals), I doubt very seriously Chad would donate one of his own smurfberries to these schemes he rountinely espouses.

You got two things wrong. First, Papa Smurf should be taking a lot more of my smurfberries, and those of all other smurfs like me. I have said this repeatedly. Second, I give away plenty of smurfberries, far more than most. Most of the smurfberries go to environmental and conservation organizations.

|5.27.09 @ 11:36AM|#

What's so wrong about increasing life expectancy and quality of life?

Nothing.

Now, if you had asked "what's wrong with State-sponsored social engineering schemes that claim to increase life expectancy and quality of life", we could have a discussion.

JB|5.27.09 @ 1:02PM|#

What this shit hits the fan it won't be pretty.

Oh, I don't know about that. I kinda look forward to seeing Democrat clumps of cells aborted en masse.

bill|5.29.09 @ 12:18PM|#

yea but the thin non smokers are more active during their lives and are producing then you did not take that into account

|5.29.09 @ 5:01PM|#

You're an idiot. Set aside the high cost of health insurance and life insurance because of the MILLIONS of apparently retarded Americans who get lung cancer from smoking, or diabetes from their Dr. Pepper I.V. drip. Set aside the issue of air pollution, birth defects, and the practically unending list of damage caused by smoking.

Forget all that. Lets just focus on the main argument here.

Even with no Government funded health care of any kind, drinking liquid candy while inhaling rat poison is still a financial burden on society as a whole. Doctors are required to treat the sick regardless of whether or not they have insurance. So if we never have Universal Health care, eliminate Medicare and allow fat asses to drink corn syrup and breath smoke unabated, guess what happens. Uninsured people dying of diabetes and lung cancer slowly pull the hospitals under.

At least with Government health care paid for by a (very tiny) tax on soda, people can be treated before they are on the verge of death, change their habits and maybe just maybe convince a few folks out there to drink something else. Maybe some juice or tea or hell some freaking water!

Normally I am not the kind of person to say "The Government shouldn't be telling people how to live healthy!" but apparently, from what I can see; Americans are soooooo fucking stupid these days they need their President to tell them its a good idea to WASH THEIR HANDS to avoid getting the flu.

Until people learn to take care of themselves don't be surprised when the Government steps in to save them from their retarded selves.

|5.29.09 @ 5:04PM|#

The notion that a healthy, longer living society is a bad thing because it's too expensive is the most idiotic argument I have ever hear. Wanna cut down on the number of healthy Americans? Feel free to go kill yourself.