Tax Lawyer's Blog

Led by Governor Paterson, New York is considering the imposition of a tax on sugary drinks according to TaxGirl, Kelly Phillips-Erb:

[T]he state of New York is considering imposing a so-called “fat tax.” While each municipality is a little different, the New York proposal would slap an 18% tax on sodas and sugar-filled drinks which contain less than 70% real fruit juice.

The official position on the “fat tax” is to discourage consumption of high-caloried drinks. The government projects a 5% drop in the number of sugary drinks that New Yorkers drink.

Kelly says the tax is less about promoting healthful behaviors and more about finding a new source of state revenue:

What Governor Paterson is really hoping to do is close a gaping hole in the budget: according to the Governor, the new tax will raise almost half a billion dollars in 2010-2011. In a tight economy, taxpayers will howl at the idea of raising personal or property taxes. Taxpayers are far less vocal about a tax on items that health officials have already labeled as bad for you.

Food for Thought

State and Federal governments have been using the tax code to influence behavior since the beginning of time. There are tax credits for people who hire certain types of hard-to-employ individuals; tax credits for businesses that invest in low-income housing; and special deductions for people who buy rather than rent their homes.

A “Sin Tax” like the one proposed by Governor Paterson is simply a form of negative reinforcement: The State is trying to condition it’s citizens by causing them to associate pain with the act of buying products that are deemed to be “bad” for their health.

But how is that different in kind than rewarding people for engaging in certain types of behaviors? Both policy mechanisms use taxation or the relief from taxation to control the behavior of otherwise autonomous, independent human beings.

It seems to me that if you are going to oppose the imposition of a Sin Tax, you should also oppose the imposition of taxes that are used to positively reinforce certain types of behavior.

And if you oppose the imposition of a Sin Tax on the grounds that negative reinforcement doesn’t work, then presumably you would agree with the State giving a tax rebate to people who buy healthful foods.

Listen to educator and martial arts instructor, J. Richard Kirkham, on the benefits of positive reinforcement versus negative reinforcement:

Self-confidence and a lack of fear to attempt to achieve tasks without negative reprisals due to temporary lack of achievement is a must for the building blocks for both leadership and innovation. Without consistent positive reinforcement the child’s chances of realizing this self-confidence to perserveer and to develop and initiate new ideas and methodology is greatly restricted.

Do you want your child to want to do the right thing or be afraid to do the wrong thing?

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