January
8, 2006
Hot Tubs And Cold Moralizing
By George
Will
``The
taxing power of government must be used to provide revenues for
legitimate government purposes. It must not be used to regulate
the economy or bring about social change.''
--President
Ronald Reagan
State of the Union message
Feb. 18, 1981
``(b)
no portion of the proceeds of such issue is to be used to provide
(including the provision of land for) any private or commercial
golf course, country club, massage parlor, hot tub facility, suntan
facility, racetrack or other facility used for gambling, or any
store the principal business of which is the sale of alcoholic
beverages for consumption off premises.''
--Title
26
Internal Revenue Code
(tax exemption requirements for qualified redevelopment bonds)
WASHINGTON -- Well, yes, certainly no massage parlors. Or hot
tubs, of course; one shudders to think what happens in those.
And tanning facilities, too, are the Devil's playgrounds. As for
racetracks, although state governments promoting their lotteries
are America's most energetic advocates of gambling, government
should err on the side of caution when protecting whatever this
tax provision protects by frowning on racetracks, hot tubs and
other things.
This peculiar
wrinkle in the tax code, first approved the year after President
Reagan said the tax code should not be used to leverage social
change, makes certain projects ineligible to be financed by industrial
redevelopment bonds that are subsidized by preferential tax treatment.
This provision recently popped back into the news, thanks to Katrina.
That ill
wind blew some (barely) offshore casinos onto the shores of the
Gulf Coast. As part of the plan to ``rebuild,'' as the saying
goes, the damaged coast, such bonds are going to be issued. But
not promiscuously. Some legislators do not want tax-subsidized
bonds to finance the rebuilding of casinos.
Not that
the casinos need help: They are rebounding briskly, even expanding.
Still, government has a sorry record of dispensing billions in
corporate welfare for flourishing businesses.
It is mysterious
why states or localities that want casinos operating nearby --
and providing jobs and tax revenues -- also want them afloat,
a few feet from a riverbank or ocean shore. (Mississippi has just
decided to let them come ashore.) Does the narrow band of water
provide prophylactic protection against sin? The communities already
have weighed the sin against the jobs and revenues and found the
sin congenial.
But such
awkward questions arise when government begins moralizing, especially
about the minutiae of life, such as hot tubs. Which brings us
to Reagan's 1981 statement about inappropriate uses of the tax
code.
He disliked
government using the code to conduct industrial policy, picking
commercial winners and losers, which is a recipe for what is called
``lemon socialism'' -- tax subsidies for failing businesses that
the market says should fail. Regarding the second part of Reagan's
statement, any tax code is going to shape society. But he opposed
manipulating the tax code to stigmatize this or that consumer
preference. Which is what the code's anti-hot tub provision does.
One wonders:
Why did the social improvers who used the code to put the government,
in its majesty, on record against hot tubs and tanning facilities
not extend their list of disapproved choices? Their list looks
morally lax.
Really stern
social conservatives probably favor explicitly proscribing government
assistance to lots of things, most of them somehow involving sex.
Government could preen about being too moral to subsidize, with
tax-preferred bonds, economic projects that include bookstores
that sell Judy Blume novels, or hotels that offer in-room pornography.
And wouldn't it be fun to find the words ``lap dance'' in the
nation's tax code?
As strongly
as social conservatives deplore commercialized sex, liberals deplore
cigarettes, Big Macs, firearms, fur coats, SUVs, pornography not
printed on recycled paper, pornographic movies produced by nonunion
studios, holiday trees provocatively labeled ``Christmas trees,''
and much more.
But do we
really want to march down this road paved with moral pronouncements?
When government uses subsidies to moralize, as with tax preferences
for bonds that can be used to finance this but not that, government
is speaking. It is expressing opinions about what is and is not
wholesome. And once government starts venting such opinions, how
does it stop?
Government
could spare itself the stress of moralizing about so many things
if it decided that the choices people make with their money is
their, not its, business. And government could avoid having opinions
about so many things if it would quit subsidizing so many things.
When, for
example, the valuation and allocation of money through bonds is
left to the market, government can be reticent. And reticent government
sounds wonderful.
©
2005, Washington Post Writers Group
