Sin tax revenues

A View From the Edge

Avoiding abuse of addictive liquids and other such things has always been the reasoning behind licensing for taxation. The argument goes like this: “If we tax the product to the hilt, it’ll wean the people off.”

OK, that is partly true. I know many smokers who have cut down because, as they put it, “these darned things are just too darned expensive.” (I edited the expletives they really used).

Sometimes the forces of moral prohibition have prevailed and substances are banned altogether. Of course, a ban does nothing to curb desire in the truly addicted but drives them underground to illicit supply.

Prohibition does, of course, strengthen the moral fiber of some to the point that they avoid what may have been a daily habit. A beer or two after work, for such strong-willed people, quickly becomes a Coke or two (which contain more calories, but that is another discussion).

For others the beer or two after work became, in the early 1930s, a chance for little Johnny, aged 8 (and below the age of arrest) to earn extra pocket money by fetching a pail of beer for Dad from the local speakeasy.

I have a client who was the chief mob hunter (as the New York Times labeled him) in New York City. He was, as Gotti put it, “my arch enemy.”

In the early part of his career, the police knew exactly how much heroin was coming into the five boroughs. If it increased (meaning a push for new clients), the police would raid Bumpy Johnson in Harlem (the main mob heroin supplier) and confiscate the excess.

Why didn’t they shut Bumpy down? Because the police knew that there were addicts and without a supply they would become violent and turn to more dangerous drugs. In other words, they were keeping a lid on the problem as best they could (as there was no effective rehab).

When Nixon wanted to base U.S. strategic bombers and missiles in Turkey, Congress said, “No!” because Turkey was the main supplier of heroin that wound its way to the United States.

So Nixon had the poppy fields burned and two things resulted. First the New York supply dried up and the addicts were easy prey for the cocaine dealers from South America (none of which the police had intelligence on).

The second thing that happened was that, within 10 years, the poppy growers moved to Burma and also to Afghanistan. Both countries fell prey to the illicit revenue generated and became totalitarian regimes that we’re struggling to deal with today.

Amazing what the trickle-down effect of addicts in American can be.

And amazing is the word being used this week across Europe as Russian President Dmitry Medvedev proposed and signed into law a reclassification of beer as alcohol.

People are amazed that Russia didn’t consider beer as an alcoholic drink up until now. Why should they be surprised? The Egyptians in the time of the pharaohs considered beer as food and paid workers with that liquid food. Beer keeps better than bread, after all, and is more refreshing at the same time.

In Russia the two staple drinks are vodka and beer. It was Yeltsin who licensed vodka (ironic that the alcoholic Yeltsin would do so) to generate revenue for the state. Since then vodka sales have slumped 30 percent.

Now Medvedev has done the same to beer, opening up a revenue source based on the increase in sales of beer by 40 percent since they started taxing vodka. All this has been done under the guise of stopping alcohol abuse.

But even by their Academy of Sciences findings, “the annual consumption of [units of] alcohol has not dropped per capita.”

So the government raised the tax on beer 200 percent. Meanwhile vodka is twice as expensive as it once was, and these new beer prices in a land which consumes the fourth largest quantity of beer per capita in the world have forced a slump in sales.

What has not slumped is — you guessed it — the black market, mafia booze importation, and, alarmingly, the increase in drug trafficking.

Licensing a habitual substance, all under the guise of curbing abuse, is seen by many as just a new tax source. Others rightly point out that licensing a product allows a control over the content, in the interest of public safety.

After all, one beer during a meal might allow you to walk home. One unlicensed beer with three times the alcohol content may cause you to fall in the gutter. Safety is a public matter.

But what is also a public matter is the trickle-down effect of trying to regulate everything in close view and not keeping an eye out for the end cause. As my police crime-fighter would say, pity we did not think of the benefit to the Taliban or the cocaine growers of Columbia when Nixon burned those fields.

Peter Riva, formerly of Amenia Union, lives in New Mexico.