Propositions 86 & 87

(For the non-Californians: Prop 86 proposes a hefty tax increase on tobacco with 100% of the raised money going to various health concerns, and Prop 87 proposes a $4bn tax on oil companies to fund alternative fuel development. The oil companies are not allowed to pass the tax on to the price at the pump).

Opponents of Prop 86 say that it allocates almost 40% of the money to causes which have nothing to do with reducing smoking. They also say that the raised money will pay for things other than treating smoking related illnesses. This seems to me to miss the point. For a start, no tax is levied purely to pay for things related to that tax. Things just can't work that way.

Secondly, opponents (and perhaps, proponents) miss the fact that just by existing, the tax reduces smoking. Punitive taxes are not in general a good way to raise money, because they are so effective at discouraging the behaviour they are trying to tax. A prime example of this is London's congestion charge. It was so good at deterring motorists from driving into London that only a short while after its introduction, the charge had to be raised from £5 to £8 to achieve the desired income. And there is talk of it rising again soon.

Of course, I'm not eligible to vote. But I hope that Prop 86 passes. California seems to be one of the few places where voters are enlightened enough to bring about real change. In which spirit I also support Prop 87.

I read in The Week that GWB recently invited a bunch of journalists around to the White House and told them to imagine a world in 50 years' time when a) oil was controlled by the US and its interests or b) oil was controlled by interests hostile to the US. As pointed out in the week, this is also missing the point. Far preferable is c) nobody gives a damn who controls the oil because we are no longer dependent on it. And I think Californians have a chance to take a step down that road with Prop 87. We need someone to lead in developing new technology to reduce oil dependence. Once it is economically feasible to follow that path, the world will follow California.

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