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Sin-Tax Error So Mike Bloomberg

July 1st, 2002 · No Comments

Sin-Tax Error

So Mike Bloomberg claims that raising the price of smokes in Manhattan to a whopping seven bucks per pack is an attempt to save lives, and not just a way of milking more revenue out of a politically unpopular group. The irony is that when some libertarians argued that people’s choices shouldn’t be engineered by taxes, Bloomberg responded that “it’s not exactly freedom of choice” because cigarettes are so addictive.

Ah… yes, they are, aren’t they? And addiction is the highest form of price inelasticity. That means that raising the price does relatively little to dissuade consumption: tax increases won’t make smokers cough less, it’ll just make ‘em cough up more of their statistically lower incomes. Now that’s a choice bit of hypocrisy: justifying taxation on the basis of the very property of cigarettes that makes them so lucrative to tax. Brilliant. I guess all the dope he smoked didn’t dull Mike’s mind too much.

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