Reason’s Nick Gillespie offered an interesting agument in the New York Times recently in favor of legalized drugs and prostitution. That wasn’t surprising coming from the libertarian editor and writer. The wrinkle was selling this idea to skeptics by pointing out the revenues that could be raised by taxing the sinful acts:
Consider prostitution. No reliable estimates exist on the number of prostitutes in the United States or aggregate demand for their services. However, Nevada, one of the two states that currently allows paid sex acts, is considering a tax of $5 for each transaction. State Senator Bob Coffin argues further that imposing state taxes on existing brothels could raise $2 million a year (at present, brothels are allowed only in rural counties, which get all the tax revenue), and legalizing prostitution in cities like Las Vegas could swell state coffers by $200 million annually.
Nick is hoping to legalize currently illegal acts, but there’s a sin tax movement underway for legal activities, too. Rev. Robert Sirico (”Hate the Sin, Tax the Sinner?“) looks at the recent proposals to find revenues through federal taxes on sodas and fatty foods, finding this not just economically objectionable but morally suspect as well.
Whatever economic or social benefits one can dream up from the sin tax, we must also realize that the decision to tax must be weighed against the social benefits for reducing the behavior by slow and deliberate persuasion and voluntary action. When it comes to public policy, the preferred method of discouraging sin should fall under the category of alternative, mediating institutions, notably family, church, and school.