Letter: Taxes should alter habits

By The Daily Illini

In response to Dan Parente’s letter regarding tobacco taxes, I would like to remind him of arguably the most famous quote from the book The Wealth of Nations by Adam Smith: “it is not from the benevolence of the butcher, the brewer, the baker that we expect our dinner, but from their regard of their own interest. We address ourselves not to their humanity, but to their self-love, and never talk to them out of our necessities, but of their advantage.” In a perfect, free market economy, goods are produced according to demand from consumers. Without some sort of government regulation society would find itself with an abundance of undesirable goods and a shortage of other necessary goods.

Surely, in contradiction to Mr. Parente’s comments, taxation should be used as a tool along with government regulation to discourage the consumption of certain goods which society deems to be harmful. For example, Great Britain taxes items such as cigarettes, alcohol and gasoline highly. They are then able to, among other things, have zero tax rates on food and children’s clothing, offer a free national healthcare service and have cleaner air for future generations.

The taxation system can, and should, be used by governments to alter individuals’ buying habits and to reallocate resources for the benefit of both those individuals and for society as a whole. The government in a democracy such as the US is elected by the people and acts for the people, so is the voice of the people. Therefore the taxation system should never end up being abused, leading to unfairness and inequity.

In conclusion, Mr. Parente, if you looked at things from a much wider perspective, then perhaps you would realize that a few extra cents on a packet of cigarettes is not so bad after all.

Nick Smith

    Sign up for our newsletter!

    junior in business