Monday, May 09, 2005

Controlling behavior

Cheer's to AP's Sara Karush. Her article about a Detroit proposal to impose a fat tax strikes a good balance of news and context. She tells us about a specific tax proposal, she tells us the motivation for it (financial, as opposed to power-to-destroy, etc.), the effect of it upon the taxing jurisdiction's budget, and she throws in a study that puts Detroit's tax burden in context of other big cities. For a few hundred words, it covers a lot of territory.

A second reading yields this gem: "The city currently has five major revenue streams: state revenue sharing, an income tax, property taxes, a tax on its three casinos and a utility tax."

There's a lot of meat here for anyone wanting to study and understand taxation. Do we do it because we want to raise revenue? Is it fair, and separately is it permissible, to simply pick out some activity to tax because that's the easy way to raise revenue ("easy" either economically or politically)? Do we do it because we want to influence conduct? Or do we do it because there is some relationship between the revenue raised and a public expenditure, e.g., as the story says, to fund, er, what? Health programs! That's it!

Other cities and states have special taxes on prepared food, and some have tried "snack taxes." In New York, Assemblyman Felix Ortiz has proposed a 1 percent tax on junk food, video games and TV commercials to fund anti-obesity programs.

And then, to cap it off, Karush even gets to the problem of defining the economic activity to be taxed, which is a much more complex task than more than a handful of people realize:

And just how is "fast food" defined? Besides the obvious chains like Wendy's and White Castle, officials have mentioned takeout pizza places and Detroit's ubiquitous chili dog restaurants known as Coney Islands. It's uncertain, however, where Starbucks or the corner deli would fall.

This story just gets better and better. ColumbusGuy is in love and hopes to see more of Karush's work.


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