Sunday, February 3, 2008

New Mexico Proposes Video Game Tax to Punish Staying Indoors

Some people in New Mexico are skeptical of the Sierra Club's proposal to tax people who make decisions with which they disagree:

Dave Gilligan remembers being pushed outside to play baseball and other sports, but feeling it just wasn't for him.[...]

"If you take a kid that's just playing his X-Box or whatever and you take him outside and you make him play baseball, he's going to hate it," said Gilligan, co-owner of Gamers Anonymous, an Albuquerque video game store. "There's nothing wrong with sitting at home playing games. Everybody's doing it now."

But a coalition of groups, led by the Rio Grande chapter of the Sierra Club, is sold on the idea that outdoor education programs can inspire children in a way that video games and television cannot.

The coalition wants state lawmakers to create a No Child Left Inside Fund with a 1 percent tax on TVs, video games and video game equipment. The fund would help pay for outdoor education throughout the state.

Supporters of the tax—which would be the first of its kind in the nation—say outdoor programs have been shown to improve students' abilities in the classroom, boost their self-confidence and teach them stewardship and discipline.

The fundamental purpose of taxes is to raise revenue necessary for programs, not micromanage people's decisions with subsidies and penalties. If a tax targeting video games is justified, it should be on the basis of actual negative externalities, not the whims of social engineers picking things they don't like at random.

We discussed a similar video game tax proposed by a Wisconsin state senator:

Why not put taxes on certain types of music, clothes, or entertainment? Or why not go directly at the source and put a special tax within the income tax system on people who work at ages 16 or 17, or raise the drivers license fees on people those ages? This may sound stupid and discriminatory, but that's exactly what this proposal is.

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This month the Heritage Foundation and the Wall Street Journal released the 14th edition of the Index of Economic Freedom, a publication that ranks countries on nine measures of economic freedom: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, and labor freedom.

The U.S. ranks fifth this year, after Hong Kong, Singapore, Ireland, and Australia. At the bottom of the list are North Korea, Cuba, Zimbabwe, Libya, and Burma (Myanmar).

From the executive summary:

There are clear relationships between economic freedom and numerous other cross-country variables, the most prominent being the strong relationship between the level of freedom and the level of prosperity in a given country. Previous editions of the Index have confirmed the tangible benefits of living in freer societies. Not only is a higher level of economic freedom clearly associated with a higher level of per capita gross domestic product, but those higher GDP growth rates seem to create a virtuous cycle, triggering further improvements in economic freedom. Our 14 years of Index data strongly suggest that countries that increase their levels of freedom experience faster growth rates.

Click here for more on international taxes.

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With the upcoming 2008 presidential election, tax policy will soon be on voters' minds more than ever. Taxes are one of the central issues in any national election, and it is important for the public to understand candidates' general views toward tax policy as well as their positions on specific issues, such as the alternative minimum tax (AMT) and corporate tax rates. While some candidates have been more forthcoming and specific than others about their stance on various tax issues, they will all need to divulge and elaborate on their positions as the race progresses.

To help voters sort through the details of each candidate's proposal, the Tax Foundation has released a comparison of the candidates' positions on the most important tax questions of this election. To use this page, simply check the boxes next to the names of the candidates whose plans you would like to compare and click "Compare." As the race narrows and the remaining candidates refine and expound their positions, we will expand this page.

Click here to view the chart.

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