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guy44 · 03-30-2010, 07:27 PM

It's going to be easiest if I number these:

1) There most definitely is a black market in cigarettes. I just completed a literature review on cigarette taxes and black markets for a well-known consulting firm, and I can assure you that they exist. Because it is an inherently difficult thing to track, there isn't a consensus on how large it is. Reasonable estimates vary from 4% to 20% of cigarettes consumed within the United States. So it is possible that sin taxes can result in a black market for a good.

2) However, this doesn't mean the tax is bad, nor that it will necessarily result in a black market. Anyone who believes that this tanning bed tax will result in a black market is on something. First of all, like almost all luxury products, the demand elasticity for tanning beds is far from inelastic (and very, very different from addictive goods like alcohol and cigarettes). People will either substitute (spray tan, natural tan), simply pay a little more, or (best of all, given the health implications) quit altogether. Secondly, black markets typically develop for items that are easy to smuggle (cigarettes) or have massive demand despite being "visible" (prostitution). Even if you prohibited all tanning beds, as long as you enforced the law I doubt a black market it tanning salons would appear. Third, most of the time people who create taxes aren't complete idiots. They have likely figured out (or rather, public health economists have figured out and convinced them) that the tax will probably reduce demand, raise revenue, and prevent some cancer. All to the good.

3. I'm not a lawyer, but I highly doubt that this could be construed as a racially biased tax. And there are many taxed activities which break down sharply on gender lines.

4. As someone mentioned, I highly doubt tanning salons as a whole are 98% women and 99% white, or whatever. That's just the experience of one single salon.

Added:

5. Craven: Obesity cannot be taxed. Obesity is a health condition. Tanning on a beach is a private, non-economic activity. Only goods and services can be taxed. Alcohol and tobacco are goods. Tanning salons offer services. And yes, alcohol and tobacco most certainly are taxed in part because of public health concerns (see Ontario's failed attempts at taxing cigarettes in the early 90s). Even if they weren't, there's no reason they couldn't be - there is nothing in the constitution to prevent taxation of goods or services for public health reasons. Even now, cities such as New York have instituted a soda tax expressly for the purpose of reducing consumption for health reasons.

03-30-2010, 07:27 PM	#29 (permalink)
guy44 Somnabulist Location: corner of No and Where	It's going to be easiest if I number these: 1) There most definitely is a black market in cigarettes. I just completed a literature review on cigarette taxes and black markets for a well-known consulting firm, and I can assure you that they exist. Because it is an inherently difficult thing to track, there isn't a consensus on how large it is. Reasonable estimates vary from 4% to 20% of cigarettes consumed within the United States. So it is possible that sin taxes can result in a black market for a good. 2) However, this doesn't mean the tax is bad, nor that it will necessarily result in a black market. Anyone who believes that this tanning bed tax will result in a black market is on something. First of all, like almost all luxury products, the demand elasticity for tanning beds is far from inelastic (and very, very different from addictive goods like alcohol and cigarettes). People will either substitute (spray tan, natural tan), simply pay a little more, or (best of all, given the health implications) quit altogether. Secondly, black markets typically develop for items that are easy to smuggle (cigarettes) or have massive demand despite being "visible" (prostitution). Even if you prohibited all tanning beds, as long as you enforced the law I doubt a black market it tanning salons would appear. Third, most of the time people who create taxes aren't complete idiots. They have likely figured out (or rather, public health economists have figured out and convinced them) that the tax will probably reduce demand, raise revenue, and prevent some cancer. All to the good. 3. I'm not a lawyer, but I highly doubt that this could be construed as a racially biased tax. And there are many taxed activities which break down sharply on gender lines. 4. As someone mentioned, I highly doubt tanning salons as a whole are 98% women and 99% white, or whatever. That's just the experience of one single salon. Added: 5. Craven: Obesity cannot be taxed. Obesity is a health condition. Tanning on a beach is a private, non-economic activity. Only goods and services can be taxed. Alcohol and tobacco are goods. Tanning salons offer services. And yes, alcohol and tobacco most certainly are taxed in part because of public health concerns (see Ontario's failed attempts at taxing cigarettes in the early 90s). Even if they weren't, there's no reason they couldn't be - there is nothing in the constitution to prevent taxation of goods or services for public health reasons. Even now, cities such as New York have instituted a soda tax expressly for the purpose of reducing consumption for health reasons. __________________ "You have reached Ritual Sacrifice. For goats press one, or say 'goats.'" Last edited by guy44; 03-30-2010 at 07:35 PM..