Isn't It Funny How Governments Loosen Their Morals When Cash Is Short?
From Dan Okrent‘s recent Q&A about Prohibition: “No factor played a larger role in the repeal of Prohibition than the government’s desperate need for revenue as the country fell into the grip of the Depression.”
In short: governments who hate vice suddenly hate it much less when cash flow is slow. And we are seeing that again today.
- Congress may overturn a four-year-old ban on Internet gambling in order to tax it. (One potential conflict: most states rely on proceeds from their own lotteries, which carry a comically huge vig of at least 30%.)
- In California (and elsewhere), marijuana is becoming increasingly available, and is being taxed accordingly.
- Hard-hit local governments are loosening alcohol restrictions in airports to raise tax revenue.
On the other hand, the federal government seems to be moving in the opposite direction where the big money is concerned — proprietary trading. And, while prostitution taxes are being considered, I still haven’t heard any serious discussion of this sex-tax proposal.
It should also be noted that one of the I.R.S.’s most miraculous enforcement ideas was originally rejected on the grounds that it was “too much like 1984,” but when Congress was desperate for more tax revenue, it thought differently.