Heavy Lifting - thoughts and web finds by an economist
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Thursday, March 05, 2009
I am somewhat fascinated by the tendency for government to send mixed signals concerning vice. On the one hand, government and activist groups argue that vice is indeed vice and should be curtailed, e.g., smoking, gambling, drugs, sex, video games, alcohol, etc. However, at the same time government recognizes the relatively inelastic demand for vice and therefore targets it for disproportionate taxation. There is generally some lip service paid to the idea that the tax on vice is to be dedicated to mitigating the behavior, e.g,. through information programs such as anti-vice advertising and education, but more often than not the tax is used to fund something virtuous.
In many states the monopoly on gambling is granted to the government in the form of a lottery and proceeds are used for education. In Texas the state legislature passed a $1 per pack tax to fund K-12 education. Now, the state of Pennsylvania has decided that video poker games are acceptable if the taxes collected from the machines are dedicated to college tuition grants. The state legislature has put a video gambling bill on the "fast track" with hopes of generating upward to $150m by the fall semester.
As this story points out, there are evidently a lot of people that are anxious for gamblers to get busy gambling:
Efforts to legalize thousands of video poker machines to generate tuition relief funds for certain college students are on the fast track.As theory would predict, there is a price at which principle will be sacrificed.
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