Raising Minimum Smoking Age

[traininthedistance]

so, the question always is, where to draw the line.  the most convenient answer for the politicians is to tax the product at point of sale.  tobacco taxes are extremely regressive.  a sugar tax would be regressive, albeit less so.  

I'll simply say that "convenience" is far from the only reason that excise taxes are chosen as a solution.  They make solid Pigouvian sense even in the absence of political constraints, and in a very real sense constrain the liberty of the consumer less than other approaches such as outright bans, rationing, the sorts of state monopolies set up for alcohol after Prohibition, etc.

That consumption taxes (certain specific luxury goods excepted) tend to be regressive in practice is an issue, yes. But it's one that needs to be balanced against the severity of the externality problems, and also one that can and should be remedied in other parts of the code instead.  For most things, I'd be willing to entertain arguments that a proper balancing test of the external consequences vs. distributional pain should keep rates low.  Fossil fuels and tobacco are, however, the two shining examples where the harm is so urgent and pervasive that high-to-punitive rates are a moral imperative.  Eh... with tobacco, it might in fact be high enough already.  I'm plenty anti-tobacco, but this is a battle that has been largely won, at least in our neck of the woods.

[traininthedistance]

so, the question always is, where to draw the line.  the most convenient answer for the politicians is to tax the product at point of sale.  tobacco taxes are extremely regressive.  a sugar tax would be regressive, albeit less so.  

I'll simply say that "convenience" is far from the only reason that excise taxes are chosen as a solution.  They make solid Pigouvian sense even in the absence of political constraints...

That consumption taxes (certain specific luxury goods excepted) tend to be regressive in practice is an issue, yes. But it's one that needs to be balanced against the severity of the externality problems

right.  and the fact that these harmful goods are inelastic in demand.  a 30-year, pack-a-day smoker does not "choose" to smoke his next cigarette in the sense that I'll go choose to eat at x restaurant for dinner.  it's a captive, often poor consumer base, and my personal feeling is that $12 for a pack of cigs, $9 of it taxes, is exploitative and targets the poorest segments of the population.

something similar is true of gas taxes: people can't just up and choose not to commute to work via car anymore.  the society was deliberately designed to be sprawl-y in the early-to-mid 20th Century, for the benefit of the auto, gas and oil companies.  the only silver lining (though it seems weird to call it that) is that this targets the lower-middle through upper-middle classes rather than the underclass.

punitive taxes are not real solutions to problems.  they're a way for politicans to raise taxes in a way that's politically feasible.  the strategy with tobacco has actually been working: demonize it, massive ad campaign, free nicotine replacement starter kits, etc.  the % of the US that smokes has declined propitiously since its peak in the 50s/60s.  (of course the tobacco companies have shifted to targeting Asian markets, so even as they lose the lobbying battle here [except for the tobacco belt states, VA, SC, etc] they'll perfectly profitable).

the way to tackle the fossil fuel problem is much more difficult and complicated.  it's take massive public investment (hundreds of billions, trillions...) in both mass transit and alternative energy sources. it would face mass resistance from some of the most powerful sectors of capital. I'm pessimistic we'll get anywhere with that on any sort of mass scale.

Well... you do realize that a lot of the proposals to institute carbon pricing have a "feebate" component, where a portion of the revenues just get turned right back around as a citizen's dividend, or somesuch?  That ought to by itself allay most distributional concerns.

Second, relatively inelastic is not the same thing as perfectly inelastic.  There are changes and choices that people can make, even in our current environment.  Not everyone can move to Manhattan... but everyone can shop online or get a smaller car (and most people can choose where to live in such a way as to lessen their commute). And, well, the current sprawl paradigm wasn't around forever, it would be irresponsible to assume that it'll be around forever (and, thus, passively let it stick around until a shock renders it completely untenable, rather than work to repair its scars).

Finally, pessimism simply isn't an option here. Throw up your hands and say, "oh well, it's too big, no way to fix it", and well, that's gonna cost us way more in the end.  It's not gonna get fixed immediately, but you know what they say about those thousand-mile journeys...

[traininthedistance]

Well... you do realize that a lot of the proposals to institute carbon pricing have a "feebate" component, where a portion of the revenues just get turned right back around as a citizen's dividend, or somesuch?  That ought to by itself allay most distributional concerns.

The relevant concern here is that carbon pricing is likely to be harmful for some low-income groups, not that it can't be otherwise. Consider, for instance, the Regional Greenhouse Gas Initiative. In New York State, money from these carbon permit auctions is supposed to fund renewable energy and energy efficiency programs.¹ In practice, it's a massive pot of money that sufficiently powerful political actors can raid for other purposes. Some RGGI funds may even go toward constructing the new Tappan Zee Bridge.

I agree with the rest of your post, by the way. But, as a supporter of carbon pricing, I prefer admitting to weakness on this front. It's the only honest answer in the face of a political process that gives very little standing to the people whom Tweed is concerned about in this instance.

¹Which, of course, disproportionately benefit commuting, landowning upper-middle class suburbanites, but we can leave that aside for now...

The difficulty with that is there are so many people who are eager to selectively say "oh no this hurts poor people!" when it comes to gas/carbon taxes (even and especially when they are far from poor themselves), but are oh-so-silent when it comes to the myriad other ways that low-income people have it rough in our society.  While I don't doubt that tweed's concern is genuine, I also don't doubt that a large percentage of the concern here is little more than concern trolling, meant to preserve privileges and sub rosa subsidies that should never have existed in the first place.

So I kinda have to fight that tooth and nail.  I mean, if folks want to raise that issue as a way to make sure that any future carbon tax has a feebate component, fine, all power to them.  I am happy to go along.  If they want to bring it up as nothing more than a roadblock/conversation-ender, and especially if they are doing so while not being at least as loud in decrying other parts of our tax/zoning codes, then f**k that noise.

And, anyway, this line even gets used on the milquetoast suggestion that fuel taxes merely be indexed to inflation.  That's nuts– indexing it wouldn't actually make the pain worse, it merely ensures that the externality-correcting effects don't get ever more inadequate over time.

There's a fine line between intellectual honesty and unilateral disarmament.  There's little that I value more than intellectual honesty– but ceding this point, I think, crosses that line, and by a pretty wide margin at that.