I Wish They Just Wanted the Money

January 23, 2006

for Jan. 25 and thereafter
616 words

by Cecil Bohanon, Ph.D.

What is the proper job of Indiana state government?

Reasonable people can and do disagree. Almost all believe the state ought to maintain prisons. Most of us think the state should have a role in financing roads and schools though perhaps not in operating them.

Traditionally, conservatives and libertarians have drawn the line here, whereas those who are more liberal or progressive have envisioned numerous additional functions for the state government. It is usually liberals who argue for tax hikes, while conservatives oppose them. Liberals want the money to finance their newfangled programs, conservatives want to stop the liberals in their tracks by stifling revenue growth.

Interestingly, in this year’s State of the State Address, the supposedly conservative Republican governor proposed a role for taxation that few politicians have been willing to explicitly endorse: the use of taxes to discourage objectionable, but legal, behaviors. Towards the end of the address, Gov. Mitch Daniels told Indiana residents: "We weigh, drink and smoke too much and exercise too little."  

OK, I can see the governor using his bully pulpit to chide drunk, lethargic, nicotine-ridden and obese Hoosiers. (Although in all fairness he should also chide those who engage in sexual indiscretions, Sabbath-breaking, overworking, staying up too late or having negative attitudes — after all, these habits are health-wrecking too.) But simple chiding is not what the governor has in mind because he went on to ". . . ask this Assembly to raise Indiana’s cigarette tax by at least 25 cents a pack."  

The governor, however, wants to increase taxes not because he wants your money but because he wants to reform your lifestyle. Frankly, governor, I wish you just wanted the money.

The logic driving this neo-prohibition is impeccable. If government pays for your health care, then government gets a say in the personal choices that affect your health. Of course, government doesn’t pay for all of our health care, just 45 percent of it. Nevertheless, if cigarette smoking drives up the medical bills paid by the state government, then the state has an interest in discouraging the filthy habit. The full costs of smoking aren’t being borne by the smokers, but by the taxpayers.

But if this were true for cigarettes, what principled reason is there to stop there?  

Overweight people also have higher medical costs, the overweight aren’t bearing the full costs of their poor eating habits . . . so why not tax fat? Of course, to tax French fries is an awkward way of attacking the problem. After all, the tax will discourage the underweight and healthy from ordering an extra portion at the local fast-food chain just as it will those of us who are a bit more portly.

So I want to propose another way to discourage being overweight: Go straight to the source. Let’s mandate a required annual weigh-in for each Indiana resident and charge each person a "fat tax" of $20 for each pound of weight in excess of established standards.  Use a chunk of the revenue to finance dieting programs to encourage the plump to shed more weight. And this is just the beginning. Think of the other health inducing tax- and-spend projects that can be thought up.

No thank you, governor, let’s not go there. Part of liberty is the God-given right to choose any fool thing you want, even if it might not be so good for you — that, coupled with the responsibility to bear the consequences of those choices.

The welfare state undermines liberty precisely because it severs the link between choice and consequence. But the way to restore liberty is not to fine-tune the art of state coercion by social engineering and regulation; it is to turn back the welfare state.

Let’s not invite Big Nanny to Indiana. That’s not the state’s job.

Cecil E Bohanon, a professor of economics at Ball State University, is an adjunct scholar of the Indiana Policy Review Foundation. Contact him at cbohanon@inpolicy.org.



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