A Tax to Support

by Don Boudreaux on March 21, 2010

in Frenetic Fiddling, Health, Hubris and humility, Markets in Everything, Nanny State, Other People's Money

Here are two letters that I sent to the New York Times:

New York State Health Commissioner Richard Daines alleges that the low prices, generous serving sizes, and vigorous marketing of sugary drinks are evidence of “market failure” (Letters, March 21).  As far as I can tell, though, Mr. Daines’s lone rationale for accusing the market of “failing” is that he and other ‘experts’ disapprove of suppliers competing hard to satisfy people’s demands for sugary drinks.

If Mr. Daines’s allegation is justified, then I’m justified in alleging that the political process in New York State has failed.  My reason?  I disapprove of the fact that many voters demand that busybodies such as Mr. Daines poke their noses into people’s diets.  I disapprove also of Mr. Daines and his colleagues working hard to satisfy these voters’ demands.

So to correct this failure, I propose an excise tax on busy-bodyness – say, $1.00 per word spoken or written that ‘experts’ (such as myself) judge will promote injurious officiousness and unhealthy meddling by government officials in the private affairs of others.

Sincerely,
Donald J. Boudreaux

(And, with reference to the above letter, because Commissioner Daines and his colleagues are spending other people’s money and have the power to force other people to bend to Com. Daines’s will, the likelihood that Com. Daines and colleagues are creating genuine negative externalities is much higher than is the likelihood that beverage suppliers are creating such externalities.)

New York State Health Commissioner Richard Daines writes that “Sugar-sweetened beverages are underpriced and oversized.  They are universally available and relentlessly marketed, particularly in low-income neighborhoods.  The 1-cent-per-ounce tax on sugary beverages supported by Gov. David A. Paterson, Mayor Michael R. Bloomberg and virtually every public health and health care professional organization in the state will begin to correct this market failure” (Letters, March 21).

Commissar Daines believes that the market fails whenever its outcomes are ones that he and other ‘experts’ find objectionable – whenever its reality diverges from his pretty vision of what other people should sell and consume.  In fact – especially given government interventions that artificially raise the prices of many grains and fruits – the market is working perfectly well here.  Consumers enjoy sugary drinks – and market competition, just as it is supposed to do, keeps the prices of these drinks low, serving portions generous, and sellers ever-striving to alert consumers to opportunities to buy.

Sincerely,
Donald J. Boudreaux

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