Debunking a Nanny State Notion: Social Engineering with Taxes

I've been wanting to write this thread for quite some time but never really had the motivation, but I saw a report on the MSM news yesterday which gave me the motivation I required. In this report they talked about how the Australian government is on the verge of placing a tax on sugary drinks in an effort to reduce obesity. The logic behind this, as explain by the "experts", is that by increasing the price of sugary drinks they will be consumed less often because less people will buy them. Totally ignoring the obvious negative impact such taxes have on the economy, in this thread I'm going to mathematically prove in a crystal clear fashion that taxes are not effective deterrents for unhealthy living choices.

A few months ago I wrote a thread titled On The Expansion of Government which is very much related to this topic. In that thread I basically explain how a government which never stops expanding is never going to balance its budget and will always need to look for additional sources of revenue, and I mentioned how many governments were already thinking about taxing sugary drinks and some already have, and why these types of taxes are taking us down a very slippery slope:

There's no doubt in my mind, that in 50 years, when I'm an old man, I will still be listening to debates about debt and taxes when I turn on the news. The pundits will still be arguing between themselves about what sort of new tax is required in order to keep the government afloat. In Australia we already have the highest cigarette prices in the world because of taxes. The empathetic part of your brain may be thinking "that's great, lives will be saved", but it's a very slippery slope.

The government is now seriously considering putting a tax on sugary drinks in order to reduce obesity. A similar tax has also been proposed by some U.S. politicians and the UK recently introduced a tax on sugary drinks (not surprising). Once a tax on sugary drinks becomes a normal thing, then they will move onto fatty foods. Before you know it, any type of food considered to be unhealthy in any way will be taxed, and it wont just be food, all aspects of unhealthy living will be taxed.

Of course they wont tax those things to make society better, they just know that if they tax those types of things people will be much less likely to challenge those taxes because they are implemented under the guise of morality. Who wouldn't want to decrease obesity right? If you're against that then you must be some delusional fool and therefore nobody should listen to you. This is exactly the same type of logic used to justify ever increasing cigarette taxes.

The method I will use to debunk this flawed nanny state notion, is to show that despite the price of cigarettes in Australia being more than twice the price they are in the U.S., the amount of tobacco consumed per capita is only very slightly higher in the United States. But before we get to the boring math I just want to point out one more relevant fact. The Australian government recently confirmed a 12.5% annual increase in tobacco tax, which means by 2020 a packet of 25 cigarettes will cost around $40 AUD (about $30 USD).

Budget 2016: $40 cigarettes will force smokers into black market claims tobacco industry

A packet of cigarettes can cost as little as 20¢ in China and a shipping container load costing $200,000 in Asia can make $4-$5 million for smugglers in Australia, according to the tobacco industry.

The government acknowledged the threat of black market cigarettes in the budget, with a $8 million to expand the "tobacco strike team" operated by the Department of Immigration and Border Protection. Offences under the Customs Act and Excise Act will also be strengthened.

At $40 a pack, tobacco by weight is heading towards being a comparable cost to illicit substances such as marijuana.

According to this business insider article and several other reports I've read, the price of a 25 pack currently costs between $25 and $30 in Australia, so lets split the difference and say the average cost is about $27.5 AUD ($20.92 USD). According to this report the price for a 20 pack in most states is between 6 and 8 USD, so lets say about $7 USD on average. If we work out the cost per cigarette we find that in Australia it's about $0.84 USD per cigarette and in the U.S. it's about $0.35 USD per cigarette.

So we find that the cost of a cigarette in the U.S. is only about 41% the price of a cigarette in Australia. Now if we take a look at the Wikipedia page titled List of countries by cigarette consumption per capita we find that the United States is ranked #58 and Australia is #65, only 7 places behind. In the column titled "Number of cigarettes per adult per year" we see Australia has a score of 955.72 and the United States has a score of 1082.87, so there's only a difference of 127.15, which equates to about an extra 2 and half cigarettes per week per person... you tell me, were the taxes effective?

They always go on about how smoking has dramatically reduced in Australia and how we have taxes to thank for it, but actually I'm willing to bet most developed nations have experienced a large decrease in the rate of smoking over the last decade because people are wising up and it's becoming more and more stigmatized by society. The exact same thing happened with water fluoridation, they claimed that the decline in tooth cavities among children in the United States was proof that water fluoridation works, whilst ignoring similar declines in almost every developed nation who didn't fluoridate their water. Nanny state logic at its finest.

Before I wrap this up I just want to say one more thing. I watched a video on YouTube not long ago where a guy from Australia visited the U.S. and walked through one of your Walmart stores. He was astonished by how large and cheap everything was, especially the alcohol, as if affordable prices was a bad thing. I'm sure that I could have proven the same thing I've already proven by comparing the price of alcohol between Australia and U.S. and then compare the amount of alcohol consumed in each country, and I'm guessing I'd get an even strong result, but I cannot be bothered, I'll leave it for someone else.

Also another important point I forgot to mention, is that things like carbon taxes are based on this same faulty logic: if we make it more expensive it will be consumed less. This is not only false for the reasons I have already stated, but also because companies will offset the extra costs by placing them onto the consumer. Furthermore, when the item being taxed is such a low level commodity used throughout all aspects of the economy, the cost of almost everything increases as a result, because the economy is fueled by fossil fuels which produce a lot of carbon. You cannot simply isolate the effect to the item you wish to tax and then expect the intended parties to pay it.

Also related... the topic of the Turnbull government agreeing to these ridiculous tax increases on cigarettes. Almost exactly the same tax rates were proposed by Labor Party last year according to reports I've read. For you U.S. members, the Labor party is some what akin to the Democratic Party and the Turnbull Liberal Party is some what akin to the Republican Party, but they are clearly drifting very far away from the original ideals with crap like this. At this point Labor and the Liberals may as well be one damn party, called the Nanny State Party. See this is why Abbott was better and why people voted him in, and the same is true for Trump, they are sick of the nanny state. I'm hoping they don't try to oust Trump like they did Abbott, he at least deserves a fair go.

a reply to: ChaoticOrder

Slight maths quibble.

The figures are cigarettes per capita. If you actually turn that into per smoker then the rate is very roughly 6 times higher or about 15 cigarettes per week.

a reply to: ScepticScot

Not exactly sure what you're saying. Surely the most accurate method would be per capita because it takes into account the number of people in the population. If you could provide the calculations you used to reach those numbers that would be nice.

a reply to: ChaoticOrder

Based on the link you provided there is not a huge difference in % of population that smokes. (16/18%).

However if only a approx 1/6 of the population smokes then my fag packet maths* would suggest that on average each smoker consumes about 15 cigarettes less per week.

To me this would suggest higher taxes don't encourage people to give up but may reduce consumption. At lower income brackets people may just hit a hard limit on what they can afford.

Not sure if this would count as a success as I would imagine the stated goal would be to reduce number of smokers not the amount they smoke.

Not really disagreeing with you regarding your general point, I am not a big fan of 'sin' taxes except in certain circumstances.

*Lame joke intended.

a reply to: ChaoticOrder


Actually, you explained if very well early in your extended views: As government grows, so does its need for more revenue (taxes).

Depends on how high the tax is.

I quit smoking because the price of cigarettes went stoopit.

Further compounding the issue of taxes on cigarettes, often the tax is proposed with a certain portion of the proceeds benefitting cancer research and treatment facilities, lung cancer being most oft mentioned. Should everyone stop smoking, that tax revenue stream would go away, but most certainly lung cancer would not. So the money to continue those programs has to be sourced from elsewhere, so more taxes.

a reply to: ScepticScot

Well it seems to me like your math is some how wrong.

The figures are from 2014 so I'll use data from that year.

US Population in 2014 = 319 Million
AU Population in 2014 = 23.5 Million

Cigarettes smoked by US pop annually = 319 * 1082.87 = 345435.53 Million
Cigarettes smoked by AU pop annually = 23.5 * 955.72 = 22459.42 Million

% of US pop that smokes = 18% = 0.18 * 319 = 57.42 Million
% of AU pop that smokes = 16.1% = 0.161 * 23.5 = 3.78 Million

Cigarettes smoked per US smoker annually = 345435.53 / 57.42 = 6015.94
Cigarettes smoked per AU smoker annually = 22459.42 / 3.7835 = 5936.15

So by my calculation there's only a difference of 79.79 cigarettes per year, meaning US smokers only consume 1.5 more cigarettes per week compared to AU smokers.

By the way guys if you like this thread please give it a flag, I put a bit of effort into it and I feel it's a very important subject right now.

originally posted by: Snarl
Depends on how high the tax is.

I quit smoking because the price of cigarettes went stoopit.

Well obviously some people will stop smoking if the prices get too high but these figures seem to show it's only a very small number of people overall, which seems true to me because most smokers I know continue to smoke every time the price increases. It's the same thing with a carbon tax, people aren't going to start driving less and manufacturers aren't going to slow down the production rates.

Alcohol is probably the best example, so let me do a brief comparison now that I have a spare moment. From what I can tell the prices are around 3 or 4 times higher in Australia. Yet if we take a glance at the Wikipedia page titled List of countries by alcohol consumption per capita we find that Australia consumes far more alcohol per person compared the United States and is well above the U.S. when the list is sorted by total liters of alcohol consumed per capita.

The reason for our high level of alcohol consumption despite the high prices is simple: it has been ingrained into our culture, having a few beers while watching the footy is like the most Australian thing you could possibly do... not my cup of tea but that's what our culture is like. The point I'm making is, you cannot change the nature of a man by simply increasing prices, people will find a way to live an unhealthy life style if that's what they desire.

a reply to: ChaoticOrder

I agree. Cost is somewhat relative.

When the big tobacco companies lost the suit, the price of smokes went up a lot overnight. The frogs all felt it.

Now, since then, that price has more than doubled again. Though I always enjoyed a smoke, I know what it does to me and I'm not willing to sign-on again at that cost. That one was a steady rise in temperature and the frogs really didn't take notice.

The person I feel for the most though is my mom. She's smoked almost her whole life. Now that she's at the end of it, the medical industry has taken away her one vice. Mom 'truly' suffers ... and I know her pain. It may be the reverse of what we'd naturally expect, but she's one very uncomfortable croaker.

a reply to: Snarl

That one was a steady rise in temperature and the frogs really didn't take notice.

I think most people definitely have taken notice of the increased prices and they are feeling it, but as I've shown here price increases really aren't very effective deterrents unless you increase the price so much people simply cannot afford it... which is totally ridiculous logic when you apply it to things like sugary drinks. Remember how I said Labor proposed the same taxes last year? Here's an article from last year I recently came across:

Labor aware cigarette price rise to $40 a packet will hurt poor people, Chris Bowen says

The Labor Party announced earlier that, if elected, it would gradually increase tax on cigarettes, continuing beyond 2017.

"Poor people do smoke more, poor people die earlier," Mr Bowen said.

"That is unacceptable to us in the Labor Party, peoples' wealth is leading to lower life expectancy right across the country.

"There is a number of reasons why that is the case, but smoking is up there as a cause for people who are on low incomes dying earlier than people on high incomes.

"That is offensive to us as the Labor Party. This is a measure which will make a contribution to doing something about that."

You know why this argument is so absurd right? Because actually what they're doing is decreasing the living standards of already impoverished people by increasing the price of items they heavily use, and which they are very unlikely to stop using regardless of price increases. There's a reason these types of people smoke in the first place, it's because they live stressful lives. So all these arguments of morality are baseless, the left likes to act like they care but they know these types of taxes actually do more harm than good, and that is what is truly offensive to me.

Obviously the government doesn't really want everyone to stop smoking because then the huge amount of revenue then draw from it would dry up. More to the point, the whole idea of trying to control how people behave with taxes; what they eat, what they drink, etc, is also ethically questionable. Even if it does work, what right does the government have to dictate our lives like that, if I want to eat an extra large pizza by myself and wash it down with a coke that's my business. If I want to have a smoke and a scotch it's my decision and I will deal with any potential consequences.

a reply to: ChaoticOrder

The point I'm making is, you cannot change the nature of a man by simply increasing prices, people will find a way to live an unhealthy life style if that's what they desire.

I would also like to expand on this point by highlighting how the opposite is also true: if heroin was suddenly made legal and cheap, people wouldn't suddenly flock out to buy it, as has been proven by nations which have made those types of drugs legal and shifted their focus onto rehabilitation instead of criminalization. In fact I recall studies showing that levels of drug use have actually dropped in those places. The same logic applies to a child; forbid something and the child will be more enticed to do it.

14 Years After Decriminalizing All Drugs, Here's What Portugal Looks Like

Fourteen years after decriminalization, Portugal has not been run into the ground by a nation of drug addicts. In fact, by many measures, it's doing far better than it was before.

Drug use has declined overall among the 15- to 24-year-old population, those most at risk of initiating drug use, according to Transform.

There has also been a decline in the percentage of the population who have ever used a drug and then continue to do so

So this whole concept of controlling consumption levels by controlling prices or availability is fundamentally flawed. This fact is also demonstrated by the large size of U.S. food packaging compared to Australia. Over the last few decades Australian businesses have shifted their focus onto healthy food products with low fat, artificial sugar, etc. The size of the products are way smaller and they cost a lot more in terms of cost-to-weight because we miss out on the discount that bulk buying provides and Australia already has some of the highest prices in the world.

Rather unsurprisingly, if we take a look at the Wikipedia page titled List of countries by Body Mass Index (BMI), we find that Australia is ranked rather high in the last two lists, being not far behind the United States, despite the fact you guys have restaurants with names like "Heart Attack Grill" where a guy actually died from a heart attack. I highly doubt a restaurant with a name like that would be allowed in Australia yet we clearly have obesity problems, it's the claimed reason for the whole sugary drink tax in the first place.

Here's an article from earlier this year:

Shocking Statistics That Illustrate Australia's Obesity Problem

Australia, we are overweight. Alarmingly so. Worse, we are getting fatter.

In 2014-2015, a staggering 63.4 percent of Australian adults were overweight or obese -- well over half of our nation's population. That's almost two in three adults. This is an increase from 1995, which was 56.3 percent, illustrating that the problem is getting worse.