, Columnist
Why Taxing Bad Things Isn't Always Good Policy
There are usually trade-offs.
The pros and cons of taxes.
Photographer: Alfred Gescheidt/Archive PhotosThis article is for subscribers only.
The idea of taxing things that are bad for society has a powerful allure. It offers the possibility of a double benefit — discouraging harmful activities, while also providing the government with revenue.
Take sin taxes. Taxes on alcohol make it more expensive to get drunk, which reduces binge drinking and impaired driving. At the same time, they provide state and local governments with billions of dollars of revenue. Tobacco taxes, which generate more than twice as much, have proven instrumental in the decline of smoking, which has saved millions of lives.