A new report from the Institute of Economic Affairs attacks the disastrous practice of governments using sin taxes to change the behaviour of their citizens. The report follows a joint call from Michael Bloomberg and the WHO to use “intelligent taxation” to raise the price of products such as tobacco. Such taxation, the IEA argues, is regressive and far overreaches the proper competencies of the State.
Sin taxes are a nannying public policy measure. As the name suggests, advocates want to paint certain activities as bad and sinful, and to force people to act according to their own moral code. This paternalistic approach leaves no space for personal freedom or choice; liberty and respect are subordinated to moralistic ideals. This blunt approach to taxation also does not even achieve the outcome its advocates claim: evidence from the tobacco industry clearly shows that when governments attempt to limit their citizens’ choice in legal markets, consumers will most often turn to illicit sources to continue purchasing the products.
ESTA Secretary General Peter van der Mark said: “This high-handed approach to public health epitomises all that is wrong with the outlook of many legislators and campaigners today. It represents a moralistic approach to lawmaking: this is the way the State thinks people ought to live, and with carrot and stick it forces citizens to live according to this ideal. This infantilises people, removing their free will and forcing them to conform to a norm decided upon by people who think they know better. Freedom of thought and action of adult human beings is fundamental to their living a dignified and meaningful life. By encroaching on this, the State is sidelining the democratic values upon which it is based.”