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Sunday, October 21, 2012

Placing the taxing power in the hands of public health maximizers

There is a provocative piece published in the NEJM entitled "The taxing power and the Public's health" ( It takes a different tack on the Supreme Court's decision to call the health insurance mandate a tax and the implications of this decision for future use of the taxing tool to promote public health. The authors find the use of
taxes as a nudge appealing:

Taxes are an appealing mechanism of public health regulation for several reasons. They proffer “nudges” and market-based solutions as alternatives to rigid mandates. Tax-based policies like the SRP retain an element of voluntariness, especially since lawmakers can calibrate the tax penalty to the importance of the desired behavior change. There’s strong evidence that taxes affect consumption decisions. Finally, tax strategies are “win–win” for governments, either leading people to take health-enhancing steps or collecting revenue to fund health or other programs.

I find the concept very disturbing, not because I am not interested in public health, but because of the tendency for such actions to move from a constrained realm to an uncontrolled one. I am reminded of the work of Dr. Barry Schwarz, author of "The paradox of choice", who identified tendencies in all of us to function as "maximaizers" or "sufficers". Maximizers tend to refuse to settle for choices which they perceive as yielding results which could be better. Sufficers are OK with approaches and decisions which yield results which meet their ends. Coercive tools in the hands of sufficers are less likely to result in problems. Place those tools in the hands of maximizers and there will be no end to to coercive madness set in motion, all in the name of improving public health.

It all hinges on the vision of what one believes that coercive public health powers placed in the hands of zealots can and should do. It is really no different from the broader view of the role of voluntary vs. coercive tools to mold, influence, and alter human behavior. I for one view that the widespread deployment of taxing tools to "nudge" people should viewed with great prejudice. The default mode should be to allow the greatest degrees of human freedom and to implement coercive tools, whether legal or financial sanctions, as infrequently as possible.

While those championing use of taxing power to change human behavior may be motivated by the highest of motivations and believe they are furthering public good, the powers they unleash will almost certainly be exploited by those who motivations are not so noble.