Mojo - April 2005

Tax jackpot!

| Fri Apr. 1, 2005 2:02 PM EST

The New York Times reports today that states are relying increasingly on gambling revenue to fund their governments. Indeed, this has been the trend for some time, as states slash income and corporate taxes while making up their losses with "sin taxes" that fall largely on low-income families. It's not hard to come up with reasons why depending on sin taxes are a bad idea—they provide an unreliable revenue base, for one—but most disturbingly, they tend to put state governments in the odd position of promoting activities like gambling and drinking. Just listen to Delaware Gov. Ruth Ann Minner: "We have legislators every day who propose opening new venues, like a big casino on the waterfront in Wilmington or a floating barge in the Delaware River."

Interestingly enough, the "anti-tax" contingent in Washington—led by Grover Norquist, of course—doesn't much object to all this Last summer, when Texas Gov. Rick Perry proposed to hike state sin taxes in exchange for a cut in property taxes, Norquist stayed quite silent on the matter. Some people, apparently, deserve to pay taxes more than others. More to the point, many conservatives have actually come to embrace regressive taxation over the years. Back in November 2002, the Wall Street Journal denounced America's "lucky duckies": those poverty-line taxpayers who pay no or minimal income tax. (Never mind that these workers still pay payroll, sales, and excise taxes; the Journal has no time for facts.) The only way to get these workers' "blood boiling with tax rage," and hence vote Republican, was to tax them more. So, on with the sin taxes.