Sin Tax vs Minimum Wage

[LSLGuy]

All those damn government-provided socially-engineered roads.

But for them I could drive willy-nilly across the countryside in the direction *I *choose. Not the direction chosen *for me *by some faceless state bureaucrat! Libertarian head asploding!!!1111!!

[clairobscur]

@Riemann

In any event, one argument for sin taxes is the increased healthcare costs associated with the “sin”. If revenue falls because (say) less people are smoking, then healthcare costs will fall. So the argument for the sin tax is not to discourage people from consumption by imposing an artificial price so much as to insist that they pay the true overall expected cost for their chosen vice.

Sin taxes are intended to discourage people from consumption. The healthcare cost argument is obvious bullshit. The smoker will get cancer or a cardio-vascular disease at, say, 50, and his medical care will cost a lot of money. If he doesn’t smoke, what will happen? He will get cancer or a cardio-vascular disease at 70 instead and his medical care will cost a lot of money. As long as people who don’t smoke keep getting ill and dying too, we’ll have to pay for everybody final medical care. If anything, the non-smoker will cost us more, since he will get retirement benefits and regular medical care during his extended lifetime.

Why don’t we tax those leeches who eat healthily, don’t smoke and exercise regularly and end up costing us tons of money by living until they’re 90?

[Waymore]

@jtur88

The objectives of the two, and their end result, are totally different and unrelated to each other.

The sin tax has the dual purpose of discouraging certain behavior and funding the public cost of mitigating the effects thereof. Neither if which are present in the motivation for minimum wage, which has nothing to do at all with public revenue, and does not discourage any kind of behavior.

The purpose of the minimum wage is not to increase the profits of investors, and its actual or potential benefits should not be judged by how well that outcome is realized. Its purpose is to bring marginal working Americans above the poverty level. Sadly, though, many Americans and their elected officeholders believe it is the former and evaluate its merit only according to the well-being of the corporate and entrepreneurial entities.

The only connection is that they both center around money – but what doesn’t?

Sin taxes and minimum wages are very similar. Sin taxes raise the cost of doing undesirable things, thereby making them less common. Minimum wage laws raise the cost of hiring low skilled labor, thereby making it less common.

[Waymore]

@LSLGuy

Not exactly. It helps every low wage worker who keeps his/her job. It hurts those low wage workers who lose their jobs. There’s not one “them” universally harmed. There are two them’s: one helped and one hurt.

And sweeping that distinction under the rug is the usual facile argument against MW laws.

A similar issue applies to free trade. Most entrepreneurs argue free trade is a “good”. Funny they argue minimum wage is a “bad”. Not a “net bad”, just a “bad.”

Probably has more to do with which side their individual bread is buttered on than anything to do with societal-level net gains or losses.

There is a “them” harmed by MW laws: those who lose their job, businesses that leave jobs unfilled due to expense, consumers who pay more for basic goods and services. Making low skill labor more expensive encourages automation, which will further low skill unemployment.

The only facile argument is that MW laws are harmless and only the greedy and/or foolish oppose

[Waymore]

@DrDeth

Can you show that increasing minimum wages significant increases unemployment?

Sin taxes work on many levels

Can you prove sin taxes work on many levels?

The minimum wage has been politicized. Right leaning think tanks argue it raises unemployment and vice versa on the left. Nothing new about this.

But that’s really besides the point. Sin taxes, at least the deterrent aspect, works on the logic that people respond to prices. People buy less of something when the cost increases. Why wouldn’t that same logic apply to labor? To think people will smoke, gamble and drink less if you tax those activities but that people won’t use less labor when its price rises is inconsistent.

[Riemann]

@clairobscur

…The healthcare cost argument is obvious bullshit. The smoker will get cancer or a cardio-vascular disease at, say, 50, and his medical care will cost a lot of money. If he doesn’t smoke, what will happen? He will get cancer or a cardio-vascular disease at 70 instead and his medical care will cost a lot of money. As long as people who don’t smoke keep getting ill and dying too, we’ll have to pay for everybody final medical care. If anything, the non-smoker will cost us more…

It is certainly not “obvious bullshit”, because the person who lives longer is also paying more in general taxation and insurance premiums over their longer life. The relevant statistic is total lifetime healthcare costs vs total lifetime tax/insurance contribution. I can see that going either way, I have never seen a study that looked at it. It requires tricky assumptions about what you “count” by way of general tax/insurance contribution, which would depend on the healthcare system, and to what extent a destitute sick person is expected to be cared for by the state.

[rbroome]

@clairobscur

Sin taxes are intended to discourage people from consumption. The healthcare cost argument is obvious bullshit. The smoker will get cancer or a cardio-vascular disease at, say, 50, and his medical care will cost a lot of money. If he doesn’t smoke, what will happen? He will get cancer or a cardio-vascular disease at 70 instead and his medical care will cost a lot of money. As long as people who don’t smoke keep getting ill and dying too, we’ll have to pay for everybody final medical care. If anything, the non-smoker will cost us more, since he will get retirement benefits and regular medical care during his extended lifetime.

Why don’t we tax those leeches who eat healthily, don’t smoke and exercise regularly and end up costing us tons of money by living until they’re 90?

It is not obvious to many. Remember that when the tobacco companies lost the lawsuits about the dangers and damages caused by smoking, the reason was that the states were able to claim that there was a net cost to them due to smoking and they hadn’t agreed to that cost. But the states prevailed in their argument that there was a net cost in health care due to smoking. All that money the states won was supposed to go to countering the negative effects of smoking-naturally the states promptly used the money to cover budget holes and ignored the additional costs imposed by smoking. But that didn’t obviate those net costs.