Government’s Reliance on Huge Tax Increases Reaches Absurdity

Jan. 24, 2009

A piece written by Seattle Times columnist Danny Westneat caught my eye. The headline: “Sin taxes can’t fill state coffer‎.”

As a Biz Coach columnist and business-performance consultant, I don’t always agree with him. But in order to stay open-minded and up-to-date on current events, I read his columns as well as the opinions of people from the left, right and middle.  So his views on sin taxes intrigued me.

Mr. Westneat opined about a proposed state of Washington tax – a whopping increase in cigar taxes‎.

Here’s an excerpt:

“Of all the people carping about new taxes coming at them this year, I’d say few are as justified as Dale Taylor. He’s staring at a staggering 500 percent tax increase. The bills, HB 2493 in the state House and SB 6443 in the state Senate, would also raise taxes on cigarettes — by a dollar a pack, a 50 percent increase — as well as on snuff, roll-your-own tobacco and other smoke products such as cigarillos.Partly it’s to raise money, about $90 million a year, state estimates show. And to crack down on smoking,” he wrote.

Mr. Westneat is correct about the sin-tax proposal. In fact, it could best be described as punitive, full of hypocrisy and discriminatory — all faced by Mr. Taylor at the hands of state government.

So lawmakers believe it’s OK to pillage purveyors of sin with over-the-top taxes and to “crack down on smoking?”

This absurd tax proposal demonstrates a monstrous hypocrisy by state lawmakers.

Here are two examples:

  1. The state employs 1500 employees in a major sin retail operation – liquor sales.
  2. Washington has displayed documented favoritism toward tribal operations, which involves gambling, and Washington state also operates a lottery system.

The state’s liquor and gambling operations lead unsuspecting state residents to “sin,” and make them unfortunate candidates for 12 step programs – Alcoholics Anonymous and Gamblers Anonymous. Many friends and relatives of alcoholics are driven to Al-Anon. For kids troubled by their parents’ drinking, it’s Alateen.

Another irony:

The tax proposal will lead to undesired results. This hypocrisy will drive taxpayers, such as Mr. Taylor, out of business, and drive cigar smokers to tribal smoke shops where there is no sales tax. This will decrease state tax revenue, not increase it.

The whole idea about increasing any taxes is unproductive because of out-of-control spending.  Here’s a partial list of reasons:

  • The state of Washington faces a multi-billion dollar deficit in a high-unemployment downturn.
  • Washington employs a bloated level of exempt and non-exempt workers – per capita higher than other states.
  • Lawmakers are years behind in funding the lavish state-worker pension plan which is 74 percent higher per worker than in the private sector.

In fact, tax increases cost jobs – thousands of jobs – according to “Study: Tax Increases Threaten More Job Losses in Washington.”

Yet, it’s OK to discriminate against taxpayers like Mr. Taylor while running two sin operations – liquor sales and gambling? That’s hypocrisy.

From the Coach’s Corner, if you or your employees have a problem with drinking or gambling – or if you’re troubled by others’ drinking – here are helpful resource links:

Alcoholics Anonymous

Gamblers Anonymous

 AlAnon and Alateen

Seattle business consultant Terry Corbell provides high-performance management services and strategies.