« The Beauty of Law and Economics | Main | Kinder, Gentler America» Don Boudreaux
April 13, 2006
Taxes, Prohibition, and Politics
Don Boudreaux
With April 15 fast approaching, I reflect on taxes.
Did you know that the modern federal income tax in the United States was a chief cause of alcohol prohibition here (from 1920 through 1933)? In a 1994 paper in the Arizona Law Review Adam Pritchard (now on the law faculty at the University of Michigan) and I found that the income tax did indeed play this pernicious role.
We found also that a genuine silver lining around the dark cloud of the Great Depression was prohibition's repeal. This repeal had next to nothing to do with prohibition's ineffectiveness and almost everything to do with Uncle Sam's desperation, in the early 1930s, for additional tax revenue.
My and Pritchard's paper is summarized here.
Posted by Don Boudreaux in Archaeological Economics, History, Politics | Permalink
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/t/trackback/23120/4661625
Listed below are links to weblogs that reference Taxes, Prohibition, and Politics:
Comments
The the U.S.S.R.had the same solution!
Posted by: John J McDermott | Apr 15, 2006 10:02:32 AM
Could we not tax pot to pay for the babyboomers oncomoing oldness, and let the rest of us opt out?
Great blog!
Posted by: Walt from Mid-Michigan | Mar 6, 2007 2:31:24 PM
What is prohibition anyway?
Prohibition of alcohol, often shortened to the term prohibition, also known as Dry Law, refers to a sumptuary law in a given jurisdiction which prohibits alcohol. Typically, the manufacture, transportation, import, export, and sale of alcoholic beverages is restricted or illegal. The term can also apply to the periods in the histories of the countries during which the prohibition of alcohol was enforced. Usually the term as referred to a historical period is applied to countries of European culture. In the Muslim World, consumption of alcoholic beverages is forbidden according to Islamic Law.
In the early twentieth century, much of the impetus for the prohibition movement in the Nordic countries and North America came from Protestant wariness of alcohol.[1]
The first half of the 20th century saw periods of prohibition of alcoholic beverages in several countries:
* 1900 to 1948 in Prince Edward Island, and for shorter periods in other locations in Canada
* 1914 to 1925 in Russia and the Soviet Union
* 1915 to 1922 in Iceland (though beer was still prohibited until 1989)
* 1916 to 1927 in Norway (wine and beer also included in 1917)
* 1919 in Hungary (in the Hungarian Soviet Republic, March 21 to August 1; called szesztilalom)
* 1919 to 1932 in Finland (called kieltolaki)
* 1919 to 1933 in the United States
Posted by: Don - Needs Slot Machine Tips | Apr 12, 2008 7:39:23 PM
