Taxes : A Tool To Control Behavior

Is it reasonable to say that some taxes are good? Maybe, but the object is to have as few as possible. Taxes are a tool of others to control the lives of a population through lowering or raising the price of a commodity or service. Some taxes are needed, I suppose, to fund the national defense and to run a government, and according to the Constitution, that is supose to be by and for the people.

The problem, of course, who will decide what is good or what is bad for the population as a whole. What organization, or political party, should have so much power that they can control what we eat, drink or drive or think?

Keep this in mind next November when you make your X or pull the lever for the next president or the next senator.

Excise Taxes in the States
Source: Thomas Stratmann and William Bruntrager, "Excise Taxes in the States," Mercatus Center, June 2011

Taxes on the sale of goods and services are an important source of revenue for state governments within the United States. In 2010, states collected $344 billion or nearly 49 percent of their total tax revenue from sales taxes, and in the past this ratio was even higher. Fifty years ago, states received around 58 percent of their tax revenue from sales taxes, say Thomas Stratmann and William Bruntrager of the Mercatus Center.

Selective sales taxes -- also known as "excise" taxes -- are special taxes or rates that apply to the sale of particular goods or services.

The highest excise tax revenues are collected in Connecticut, Nevada, New Hampshire, Minnesota and West Virginia, with over $600 in excise revenues per capita. Wyoming stands as the only state with less than $200 in excise-tax revenues per capita.

Excise taxes play an important role in public finance and public policy. On the finance side, they are an important source of revenue, making up 17 percent of total tax revenue in 2010.

In terms of public policy, the selective nature of these taxes gives state governments a useful tool in discouraging certain types of consumption. Cigarettes, alcohol and, lately, sugary soft drinks are among the items whose use is influenced or might be influenced by state governments through excise taxation.

Although excise taxes create deadweight losses compared to a no-tax baseline, they are efficient in comparison to prohibition. A further consideration is that, where charging users directly for publicly provided goods and services is costly, excise taxes on complementary goods may be reasonable, as with fuel taxes as a proxy for the use of public roads, say Stratmann and Bruntrager.
.