There Is No Such Thing as an Innocuous Tax

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On July 17, Eric Garner was accosted by police on the streets of Staten Island, suspected of selling cigarettes on which no tax had been paid. Garner complained, the police tried to arrest him, they got him in a chokehold, and he died as a result. His death has become an issue because he was black.

Do people really need charges of racism before they see how vicious the state can be — how vicious it routinely is — when it enforces its laws?




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Up in Smoke

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With the recent release of yet another dismal jobs report, commentators in the MSM have begun to ask, “Why aren’t jobs being created?” They should have been asking themselves this question for the last 40 months, but, hey, better late than never.

Yet the possibility that the explosive growth in regulation might play a role in deterring job growth is not something they spend much time discussing.

It should be.

A recent story gives us a fresh illustration of the role that regulation plays in destroying jobs. (By “regulation,” I mean all increases in statutory law, rulings by regulatory agencies, and expansions of common law aimed at controlling business activity.) It concerns a business that I, a nonsmoker, never heard of, one that has never been destroyed by regulation.

It turns out that in the face of huge taxes on cigarettes produced by the major tobacco companies, many cigarette smokers started frequenting small stores that owned “roll-your-own” (RYO) cigarette machines. The RYO machines allowed customers to buy loose tobacco, especially pipe tobacco (taxed at a far lower rate than manufactured cigarettes) and paper tubes in the shop, and use the RYO machine to churn out a carton of cigarettes in just a few minutes.

For a devoted smoker, the attraction of RYO shops is clear. They save about half the price of regular cigarettes. And they allow smokers to blend different and more flavorful tobaccos together, and use both tobacco and paper that are free from many of the chemical additives.

But naturally, the attractiveness of the shops angered two powerful groups. First, it pissed off puritan “progressives” who just cannot stand people smoking, and are always conducting an anti-smoking jihad. Not content with insane taxes on people who choose to consume a lawful product, they want to stop it altogether.

Second, it pissed off the major cigarette makers — aka Big Tobacco — who hate seeing customers choosing to buy cheaper in little shops around the country.

So in a classic case of rentseeking (businesses manipulating the regulatory system to hurt their competition, rather than producing a better or cheaper product) Big Tobacco found a politician — the truly execrable Sen. Max Baucus (D-MT) — to insert a small amendment to a massive transportation bill that redefines RYO shops so that they fall under the same category as Big Tobacco cigarette manufacturers, thus imposing a massive tax increase on them — one that is intended to destroy them, and probably will.

Baucus of course was happy to do this for the campaign cash Altria and other Big Tobacco companies shoveled at him. And those Big Tobacco companies are happy to stomp out of existence a group of little competitors. And Obama — who never met a regulation he didn’t like — was happy to sign the bill.

But the small businesses that bought the RYO machines have been screwed. Over a thousand of these machines (they cost over $36,000 each) were purchased, but are now virtually useless.

So, for example, Robert Weissen and his partners, who own a chain of six RYO shops in Las Vegas (cheekily named “Sin City Cigarette Factory”), says he will have to shut down the machines and lay off 40 people.

There are eight million regulations in our “progressive” (i.e., neosocialist) economy. This has been the story of just one of them.




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The New Untouchables

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A recent study in the UK found that more than half of smokers lie to family and friends about the extent of their habit. And why wouldn't they? Anti-smoking sentiment is now so prevalent that cartoons are retroactively edited to delete animated cigarettes, and movies that still allow actual smoking are castigated with the same moral fervor once (and still) directed at X-rated films.

Nothing has helped me understand the social impact of stigmatizing “illegal drug users” as much as watching the stigmatization of smokers over the last decade or so. Quite apart from whether smoking is as damaging as reported, the marginalization of those who choose to do it has been instructive.

Once a socially respectable and sexy practice, lighting up a cigarette now converts the puffer into a pariah and even into a child abuser by means of the “toxic” secondhand smoke. Companies require smokers to conduct their filthy habit on the pavement outside, despite subzero weather. Some refuse to extend health insurance to smokers; others refuse to hire them at all. Public areas open to the wind and weather have been closed to smokers. Weighing the smoking-status of battling parents is a growing trend in child custody cases.

All this has occurred while cigarettes are still legal and tobacco companies reap billions in profits. While “victims” of obesity receive love and sympathy, “victims” of smoking receive hatred and contempt. And it has occurred despite the fact that — unlike illegal drugs — no one seriously accuses cigarettes of causing prostitution, theft, impaired driving, or reduced judgment. Nor are cigarettes a slippery slope to heroin. But despite the absence of such horrendous accusations, the smoker is despised and shamed. Even as she hands over more and more tax money for the privilege of consuming a legal product, the government targets the smoker with panic-inducing campaigns such as the one underway from the CDC, an agency that has invested $54 million tax dollars to promote televised “public service” announcements and posters with revolting images.

I've watched in wonder as society has created a reviled class of people virtually out of thin air.




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Enforcers of Health

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Libertarians have uneasy thoughts about the enforcers of public health. In my state, the public health authorities banned tobacco billboards — an act that some thought a violation of the First Amendment. This year, they pushed in the legislature to ban the sale of flavored cigars and pipe tobacco. In both cases, they have said that their aim is to make tobacco less attractive to children.

A century ago the fight was much more immediately vital. Then people of libertarian mind were fighting with the public health enforcers over the control of smallpox.

That disease was eradicated in the 20th century by campaigns of vaccination, many of them not entirely voluntary. In the United States, a turning point came in the epidemic of 1899 to 1902, when outbreaks of the disease prompted a political battle over compulsory vaccination. The story is told in legal writer Michael Willrich’s new book, Pox.

The push for compulsory vaccination grew out of the facts of the disease itself. It was a killer. Of people infected by the main strain of the disease, between 20 and 30% died. Smallpox was highly contagious, so that an infected person was a threat to everyone around him who was unvaccinated. First symptoms appeared more than a week after exposure, so fighting the epidemic by treating sick people was a strategy of being perpetually behind. The disease could, however, be stamped out by vaccinating the healthy.

For the progressives, the model was the Kaiser’s Germany. As Willrich says, “German law required that every child be vaccinated in the first year of life, again during school, and yet again (for the men) upon entering military service.” Germany had “the world’s most vaccinated population and the one most free from smallpox.”

In the constitutionalist America of the 1890s, vaccination was a state, local, and individual responsibility. Americans, writes Willrich, were “the least vaccinated” people of any leading country. The federal government had a bureau, the Marine-Hospital Service, to tend to illnesses of sailors; it had been started in the 1790s under President John Adams. The Service had experts in smallpox control, but they were advisory only and expected local authorities to pay for local work.

The antivaccinationists argued that compulsory vaccination would lead to other bad things. And four years later, in 1906, Indiana enacted America’s first compulsory sterilization law.

In a smallpox outbreak, the public health enforcers would set up a “pesthouse,” usually at the edge of town. They would scour the community for the sick, paying particular attention to the shacks and tenements of blacks, immigrants, and the rest of the lower classes, where the disease tended to appear first. People in these groups were subjected, Willrich says, to “a level of intrusion and coercion that American governments did not dare ask of their better-off citizens.”

Public-health doctors, accompanied by police, would surround tenement blocks and search people’s rooms. The sick would be taken to the pesthouse under force of law, and everyone else in the building would be vaccinated.

Often a community would have a vaccination ordinance that on its face was not 100% compulsory. It would declare that no child could be admitted to public school without a vaccination mark. For adults, the choice might be vaccination or jail — and all prisoners were, of course, vaccinated.

The procedure involved jabbing the patient with a needle or an ivory point and inserting matter from an infected animal under the skin. Typically it was done on the upper arm; often that arm was sore for a week or two, so that people in manual trades couldn’t work. Sometimes, vaccination made people so sick it killed them — though not nearly as often as the disease did.

Such was the background for the outbreaks of 1899–1902. At that time, two new factors emerged. First, America had just had a war with Spain, and had conquered the Philippines, Cuba, and Puerto Rico. All these places were rife with disease — and their status as conquered possessions, Willrich writes, provided “unparalleled opportunities for the exercise of American health authority.”

There the authorities had no worries about people’s rights: “The army’s sanitary campaigns far exceeded the normal bounds of the police power, which by a long American constitutional tradition had always been assumed to originate in sovereign communities of free people.” And coercive methods worked. They worked dramatically.

The second new thing in 1899 was that most of the disease spreading in the United States was a less-virulent form that killed only 0.5 to 2% of those infected. That meant that many Americans denied the disease was smallpox, and didn’t cooperate. The public health people recognized what the disease for what it was, and they went after it with the usual disregard of personal rights — maybe even more disregard, because of “the efficiency of compulsion” overseas. And they stirred up, Willrich writes, “one of the most important civil liberties struggles of the 20th century.”

Their fight was with the antivaccinationists, whom Willrich calls “personal liberty fundamentalists” who “challenged the expansion of the American state at the very point at which state power penetrated the skin.”

He continues:

“Many antivaccinationists had close intellectual and personal ties to a largely forgotten American tradition and subculture of libertarian radicalism. . . . The same men and women who joined antivaccination leagues tended to throw themselves into other maligned causes of their era, including anti-imperialism, women’s rights, antivivisection, vegetarianism, Henry George’s single tax, the fight against government censorship of ‘obscene’ materials and opposition to state eugenics.”

Often, antivaccinationists denied that vaccination worked. Many were followers of chiropractic or other non-standard medicine; this was also the time of “a battle over state medical licensing and the increasing dominance of ‘regular,’ allopathic medicine.” Of course, the antivaccinationists were wrong about vaccination not working, but they were not wrong when they said it was dangerous. In 1902, the city of Camden NJ required all children in the public schools to be vaccinated. Suddenly children started coming down with lockjaw. They were a small fraction of those who had been vaccinated, but all of them fell ill about 21 days after vaccination. Several died, and the press made a scandal of it.

Our newly conquered possessions provided “unparalleled opportunities for the exercise of American health authority.”

Under the common law of the day, the vaccine maker — the H.K. Mulford Co. — was not liable to the parents, because it had no contract with them. Nor was the government liable, though the government had required the treatment. Thus, writes Willrich, “The arm of the state was protected; the arm of the citizen was not.”

The medical and public health establishment initially denied that the lockjaw had been caused by the vaccines. This was admitted only after a consultant to a rival vaccine maker, Parke-Davis, made an epidemiological case for it. Congress responded by quickly passing the Biologics Control Act of 1902, which ordered the inspection and licensing of vaccine producers, and required them to put an expiration date on their products. It was one of the first steps in the creation of the regulatory state.

The act calmed the public and drove some smaller companies out of business. The first two licensees were Parke-Davis (later absorbed by Pfizer) and Mulford (absorbed by Merck). And the purity of vaccines, which had been improving already, improved dramatically in the following decade.

The antivaccinationists turned to the courts in a fight about constitutional principles. The argument on the state’s side was that it had a duty to protect citizens from deadly invasion, which might be launched by either an alien army or an alien army of microbes. The argument on the other side was the individual’s right to control what pathogens were poked into his body, and, as the antivaccinationists’ lawsuit contended, his right to “take his chance” by going bare in a time of contagion.

They brought their case to the Supreme Judicial Court of Massachusetts, and lost. Citing the power of government to quarantine the sick and conscript soldiers in war, the court said, “The rights of individuals must yield, if necessary, when the welfare of the whole community is at stake.” Then they appealed to the US Supreme Court. In the same year in which the libertarian side won a landmark economic-liberty ruling in Lochner v.New York (1905), it lost, 7–2, in the vaccination case, Jacobson v.Massachusetts. Writing for the court, Justice John Harlan compared the case to defense against foreign invasion, and wrote, “There are manifold restraints to which every person is necessarily subject for the common good.”

It is an unlibertarian answer. The author of Pox thinks it was the right answer — and so do I, in this case. Smallpox was indeed a kind of invasion. In the 20th century it killed 300 million of Earth's people, and disfigured millions more. And though public health people can make similar arguments, and they do, about tobacco as a mass killer, I do not support their efforts to stamp out its use by ever more state intrusion. The difference is that with smallpox the individual’s refusal to be vaccinated put others in imminent danger of death. Collective action — compelled collective action — was the only way to defeat the invader. None of this is the case with tobacco.

Naturally, the progressives wanted to apply their wonderfully practical idea to all sorts of things. Referring to epidemics and the germ theory of disease, Willrich writes, “Progressives took up the germ theory as a powerful political metaphor. From the cities to the statehouses to Washington, the reformers decried prostitution, sweatshops, and poverty as ‘social ills.’ A stronger state, they said, held the ‘cure.’ ”

The antivaccinationists argued that compulsory vaccination would lead to other bad things. They made some fanciful statements; one wrote, “Why not chase people and circumcise them? Why not catch the people and give them a compulsory bath?” But they were right. Four years later, in 1906, Indiana enacted America’s first compulsory sterilization law. This was done in pursuit of another scientific, society-improving cause that excited progressives: eugenics. In 1927, in Buck v.Bell, the Supreme Court approved Virginia’s law of compulsory sterilization of the “feeble-minded.” That was the case in which Justice Oliver Wendell Holmes — supposedly the great champion of individual rights — pontificated: “The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes. Jacobson v.Massachusetts, 197 U.S. 11. Three generations of imbeciles are enough.”

Jacobson has been cited in many Supreme Court decisions, usually to approve state power. And the applications have not been confined to medicine. In 2004, Justice Clarence Thomas cited Jacobson in his dissent in Hamdi v.Rumsfeld, which was about a US citizen captured in Afghanistan. Thomas, often regarded as the most libertarian of the current justices, was arguing that Yaser Esam Hamdi had no right of habeas corpus and could be held on US soil indefinitely without charge.

Collective action — compelled collective action — was the only way to defeat the invader. None of this is the case with tobacco.

The smallpox epidemic of 1899–1902 was a pivotal event institutionally as well as legally. The Biologics Act created more work for the Marine-Hospital Service, which a few years later became the US Public Health Service. The service’s Hygienic Laboratory, which was empowered to check the purity of commercial vaccines, later grew into the National Institutes of Health.

From the story told in Pox, you can construct rival political narratives. The progressives’ “we’re all in it together” formula about the need for science, federal authority, officials, regulation, and compulsion is there. And in the case of smallpox, progressivism put its strongest foot forward: it was warding off imminent mass death. Smallpox is one of the least promising subjects for the libertarian formula of individual rights and personal responsibility. Yet here you can also find the bad things that libertarian theory predicts: state power used arbitrarily and unevenly, collateral deaths, official denial of obvious truths, a precedent for worse things later on, and even the favoring of large companies over small ones.

I don’t like the progressive formula. But in the case of smallpox it fits, and I accept it, looking immediately for the limits on it.

Fortunately for liberty as well as health, few other diseases are as contagious and deadly as smallpox. Even Ebola and SARS — two contagious and deadly diseases of recent decades — were mostly fought by quickly isolating the sick. State power was necessary — some people were forcibly quarantined — but there were no mass vaccinations of the healthy.

Still, vaccination surfaces as an issue from time to time. It is, on its face, a violation of the rights of the person. So is quarantine. And yet it is prudent to allow both of them in some situations.

That is an admission that the libertarian formula doesn’t work all the time. Liberty is for rational adults in a minimally normal world. That is a limitation, but not such a big one. Surely it is better to design a society for people who can think, make decisions, and take responsibility, while in a few cases having to break those rules, than to live in a world designed for people defined as children of the state.


Editor's Note: Review of "Pox: An American History," by Michael Willrich. Penguin, 2011, 400 pages.



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