Academic journal article Journal of Behavioral and Applied Management

Looking for Sin in All the Wrong Places: An Empirical Investigation of the Affluenza Construct

Academic journal article Journal of Behavioral and Applied Management

Looking for Sin in All the Wrong Places: An Empirical Investigation of the Affluenza Construct

Article excerpt

ABSTRACT

Sin taxes, popular source of tax revenue, are best applied to antisocial and inelastic consumption. But what consumption behaviors are antisocial and addictive? This research examines the assumption that excessive antisocial consumption - affluenza - is addictive. Four hundred fourteen subjects completed a measure of affluenza. Analysis identified six factors: materialism, overspending, urgency, financial stress, shopaholicism, and self-centeredness. The results showed little evidence of the hypothesized level of affluenza in the American working population, with some limited impact of age, gender and education. Politicians looking for sins to tax may be looking in all the wrong places.

Introduction

In a period of declining corporate profits, retail sales, and tax revenues, consumptionbased sin taxes have become a popular alternative method of taxation. Rather than tax income, wealth or general consumption, "sin" taxes target antisocial behavior. The conventional wisdom is that taxing antisocial behavior has the potential to produce new government revenue and - in some cases - to reduce the taxed behavior.

Augustine and Aquinas recognized that there is broad, gray area that separates just taxation and legalized plunder (Todd, 2008). But tough economic times cause governments to seek new sources of revenue. This intensified search for revenue can cause politicians to explore areas previously outside their typical consideration. Tax increases on income have become widely unpopular. Consumption taxes have increased in popularity, yet with sales taxes reaching double-digit figures in many countries in the world, they are almost universally disliked from the outset. Thus the appeal of sin taxes, as they allegedly focus only on types of consumption that society overtly frowns upon. And yet, though certainly not a new idea, the evidence and historical antecedents of taxing "sin" and/or consumption behaviors that have negative consequences to both society and the individual, is indeed equivocal to the point that it warrants additional attention and research so as to enhance our understanding.

As richly documented by Altman (2009), from Pope Leo X in the 1500s taxing licensed prostitutes, to Peter the Great taxing Russian men who grew beards, the sin tax has been an established practice for a considerable time. Throughout history, since the Puritans levied taxes on morally suspect items such as liquor, tobacco, tea and meat pies (Baxandall, 2003) the application of sin taxes has had debatable results, and often even great outcry associated with it. When Alexander Hamilton proposed an excise tax on alcohol it sparked the Whiskey Rebellion and an uprising by Pennsylvania settlers had to be squashed. Most recently, due to the public outcry very recently New York Governor David Paterson backtracked on plans to raise taxes on goods ranging from downloading pornography to soft drinks.

One fundamental argument suggested by many (e.g., Baldwin, 2004), is that instead of society outlawing certain "bad behaviors", an action or policy which so often creates significant pushback, why not tax them? As in the management of environmental problems, with the pollution and enormous waste associated with commuting in American freeways; whereas environmentalists would like to allow carpoolers use the fast lane and forbid solo commuters from doing so, economists often suggest putting a stiff tax on the fast lane, and let anyone willing to pay use it. The economic perspective on sin taxes cannot be easily dismissed, as it has been often shown that outright prohibitions due to legislation can have substantial undesirable consequences and fail to reduce the consumption of the commodity in question. Instead, the proposed argument is that taxation with additional regulations can be more likely to reduce the undesirable consumption, as supported by the evidence of the prohibition of alcohol in the US, 1920-1933, where neither consumption nor prices of alcohol changed in a significant manner (Miron, 1998). …

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