For centuries, governments have delighted in raising revenue from people’s bad habits. These “sin taxes” purport to be a way of discouraging pathological and anti-social behaviors – think: $10 packets of cigarettes convince more people to quit smoking. The perverse side of this equation, though, is that, the more government depends on revenue from “sin taxes,” the more it needs people to keep on … sinning, and thus a public interest in encouraging bad behavior develops.
A case in point recently has been state and local governments’ love affair with pot. The marijuana industry has boomed as laws criminalizing the drug have been scaled back. Oftentimes, local and state governments are told by lobbyists and activists that the potential revenue gains from taxing marijuana sales make pot use a public good. The amounts of money involved can be massive too.
The obvious problem: More and more people, including kids, are smoking and otherwise imbibing marijuana, which can cause significant medical problems and long-term brain damage, as well as exacerbating social ills like family breakdown, domestic abuse, unemployment and mental illness. But hey – as long as local and state authorities are flush with cash, who cares about the human cost?
A similar narrative exists with respect to gambling. As every American has noticed, in the last few decades there have been widespread efforts to legalize gaming and to create ways for local and state governments to monetize the phenomenon. As a result, gambling is far more common than it was, and associated revenues have become integral to local and state finances.
The problem, of course, is that gambling can be, and for many people is, an addiction, and one that destroys families and livelihoods. Even for those whose gambling habits are not clinically excessive, gambling losses can be crippling. Between 6 and 8 million Americans are estimated to be problem gamblers, so the scale of the challenge is immense.
What’s more, problem gambling is often correlated with other issues, like mental health disorders, alcoholism, drug use and smoking. One bad habit, unfortunately, can feed another – creating millions upon millions of personal tragedies, not to mention vast expenses for local and state authorities charged with providing social services to those afflicted.
So, if gambling expansion is to be considered, it’s absolutely vital that it isn’t done before lawmakers carefully deliberate and ensure the pros outweigh the cons. That’s why it’s extremely disappointing that North Carolina legislators are currently mulling a rushed, lobbyist-driven proposal to offset planned income tax cuts with the legalization of video gaming.
Fiscally, the need for such an offset is highly questionable, as a coalition of citizen groups has wisely pointed out. Perversely, this move comes in the wake of a flood of campaign contributions from gaming companies and gaming executives, much of it creatively timed to avoid public scrutiny. You can see why these hundreds of thousands of dollars in donations would be prudent, though – they could create the conditions for the legalization of forms of gambling that could produce, in time, billions of dollars in tax revenues and corporate profits. But such decisions shouldn’t be made behind closed doors and for exclusively economic reasons. “They should be made in the light of day, with both an informed citizenry and experts at the table,” as the Conservative Political Action Coalition (CPAC) has observed.
Last summer, North Carolina took the risky step of legalizing online sports betting, which, in many areas of the country, is already exacting a terrible toll on ordinary Americans, especially the young. At least in this case, the legislature debated the issue for years before ultimately moving forward. The same can’t be said about current, overhasty efforts to legalize video gaming. The legislature should tap the brakes immediately, in the public interest.
In a free society, one could argue that, if people want to smoke pot or play video poker, they should be able to do so. What no one can defend, however, is a corrupt alliance between politicians and corporate fat cats designed to entrench itself in power and enrich itself by encouraging some of Americans’ worst and most destructive habits.
North Carolina, and the nation, deserve better.
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