Sin Tax Confidential: It's Always The De Classe Products That Get Popped
Over at Splice Today, Russ Smith asks "If Pepsi Is Taxed, Why Not Starbucks?":
Let's play along with the Ivory Tower bigwigs and self-appointed health gurus who are advocating the tax on "sugary" drinks as a means of off-setting the enormous costs of President Obama's back-breaking health care initiative, as well as combating bad habits. Why stop at soda? How about a tax on every calorie-laden coffee drink served at Starbucks and its competitors? After all, a vanilla bean frappuccino with whipped cream is more than 500 calories, a beverage that health researcher Mike Adams calls "dessert in a cup." Throw in a scone or brownie with one of those Starbucks "desserts" and a consumer is approaching, at mid-morning, the daily recommended calorie intake….
[New sin taxes are always] aimed at the déclassé products, such as soda and fast-food burgers…. If it's true…that "we" would be thinner and richer by laying off sugary drinks, wouldn't the same apply to the more upscale foodstuffs consumed every day? After all, obesity knows no economic boundaries; there are overweight Americans in every strata of society.
Oh, and as another sop to the alleged new bipartisanship in Washington, why not slap a heavy tax on country club memberships, restaurant meals that total more than $150 for a table of two, and increase the alcohol sin tax on pricey wines and premium brands of spirits?
For a great history lesson (the type that is actually interesting!) on how expensive goods somehow get through the sin-tax net, check out this interview Reason did with economist John Nye, who locates the origin of big government in 18th-century England from a scarifying alliance between brewers and taxmen who worked to keep cheap French wines out of the U.K., thereby securing local markets for the beermen and more excise tax for the gummint.