The Law of Unintended Consequences

What is it about the law of unintended consequences can our politicians not understand? They just cannot grasp this concept. Politicians will not think ten minutes into the future to see what harm will be caused by their actions and their ridiculous laws.

Our genius politicians are about to push legislation to charge drivers by the mile in some states. What is the end result of this? Drivers will drive less, which means less tax revenue to the government due to less fuel taxes. More money due to the mileage charge, less due to the lost fuel tax revenue, and you end up with a net reduction of revenue at the end of the day.

This is not a new concept. This has happened repeatedly in our past. As they say, those that cannot remember history are doomed to repeat it. Well, why do they keep doing the same things over and over, expecting a different result? I thought that was the definition of insanity.

For the past several years, due to droughts and mismanagement of our water resources, we have many parts of America having water shortages. The politicians and water authorities threatened fines and punishment for the overuse of water. What was the end result? That's right. People used less water; therefore, the water and sewer charge revenues to the water companies and the taxes charged went DOWN. What did they do? That's right. They had to increase the per gallon charges for water.

In many states in America, the genius politicians thought it would be a good idea to add a $1.00 per pack tax increase on cigarettes while the federal government, at the same time, is going to levy a $.62 per pack federal tax increase on cigarettes. Our politicians pushed these taxes under the guise that it would benefit their SCHIP program to help children get insurance and that fewer people would smoke; therefore, health problems from smoking would cost the government less money. Not only does this double punitive taxation on cigarettes unfairly hurt the lower income and middle classes, its whole premise is wrong. This is the most regressive tax ever invented in regards to punishing the poor and the middle class. The two promises cannot stand up in a vacuum. There cannot be an increase in revenue and a reduction of smokers at the same time. As usual, the law of unintended consequences comes into play.

Let's give the politicians the benefit of the doubt here and let's say this plan works as in their fantasies. Several things could happen.

Scenario 1: These lower and middle income people will continue to smoke their normal amounts, suffering the financial burden, while moving money from other portions of their budgets to compensate for this massively regressive tax. Hopefully, they will not have to take the money out of their food budget. In this scenario, everything is fine and dandy. The government rips off the poor and the politicians have more money to spend wastefully on things other than originally intended.

Scenario 2: As with every time in history, people will give you less of a behavior they are being punished for. Smokers will stop smoking altogether or reduce their consumption. Fewer children will start smoking. Supposedly, health costs to the government will go down. Sounds great, doesn't it? NOPE! This situation will reduce taxes to the politicians and will cause numerous other unintended consequences for our future, because politicians are going to get their money from somewhere. Cigarette companies will lose revenues, which will in turn, reduce further the amount going to the politicians. Reduced revenues at the cigarette companies means employees start getting laid off in massive amounts. Growers start filing bankruptcy. Fertilizer manufacturers suffer and start laying people off. Farm equipment manufacturers suffer and start laying people off. Farm equipment sales dealers close down. Wholesalers start laying people off. Truck drivers, who deliver the cigarettes, start getting laid off. The mechanics, who work on the tractor-trailers and farm equipment, start getting laid off. Companies that make the filters start closing or laying people off. Companies that make the paper for the cigarettes and packaging start laying people off. Convenience stores, who sell massive amounts of cigarettes, start laying people off. Liquor stores start to suffer. I could go on and on, but I feel you understand how massive the unintended consequences actually reach.

Scenario 3: This scenario will happen to some extent no matter what happens. The citizens, who are completely overwhelmed with this backdoor attempt at prohibition, start searching for illegal ways to get cigarettes to avoid the severe taxation. This scenario gives rise to the black market, where people start smuggling cigarettes into the country and have young children selling them on street corners. Imagine our jails filling up with people who sold cigarettes illegally. This scenario did not play out well with alcohol prohibition and does not work on our so-called war on drugs in this country. Needless to say, this would be a great disaster.

This concept has been proven hundreds of times throughout history. You REDUCE taxes and revenue to the government goes UP. You INCREASE taxes and revenue to the government goes DOWN. It is the opposite of what the average person would believe due to the fact that you have to take into consideration the human factor. If all factors stayed the same with spending, sales volume, and costs, increased taxes would cause income to the government to go up. Here lies the problem. By nature, humans will always give you less of what they are punished for and more of what you reward them for. As they say, you can shave a sheep hundreds of times, but you can only skin it once. The sheep, of course, is the taxpayer.

Politicians cannot, for some reason, grasp this concept. If they keep raising taxes on everything we do, from driving, using water, smoking cigarettes, and a thousand other things, they will only keep losing revenue and then have to start searching for somewhere else to overtax us. You have to remember, as they search for more avenues to tax us to death, businesses and entities do not pay taxes, they only pass the burden onto us, the taxpayer. The problem is, we taxpayers are always the ones who will have to foot the bill while these politicians are running rampant with blank checks.

Punitive taxation (especially without representation) should be illegal and the lawmakers, who put such taxation in place, should have to stand trial to answer as to why they do this to the American citizens. All I can say is this; our politicians are going to keep taxing average Americans to death until the citizens actually start resorting to violence. This may be the only way to get through to the spend-thrifts in Congress. Tea Party, anyone?