The Venn diagram above was inspired by Don Boudreaux’s post “A Mark Perry Venn Diagram Likely In the Making,” which was based on the World Health Organization’s recent global call to curtail consumption of sugary drinks with a 20% tax. A slightly shortened version of Don’s post follows:
The World Health Organization recently endorsed a global hike in the tax on sugary drinks. The stated goal is to improve people’s health by raising their costs of consuming high-calorie drinks. (Ignore here the officiousness of bureaucrats who arrogantly fancy themselves to be entitled to recommend the forcible extraction of money from people who act in ways that those bureaucrats have divined are ‘bad’ for those people.)
Credit the WHO staff at least for correctly understanding basic economics: artificially raising the cost to buyers of acquiring drinks of kind X and Y will reduce (at least in above-ground markets) the number of drinks of kind X and Y that are purchased.
Yet I wonder how many are the pundits, professors, politicians, and preachers who will favorably and self-righteously wave the WHO’s recent proposal as they support hiking taxes on sugary drinks because they predict that such taxes will reduce the quantity of such drinks demanded and who also self-righteously support hiking minimum wages because they predict that such minimum-wage hikes will not reduce the quantity of low-skilled labor demanded. I’ll bet that the number of such inconsistent people is large.
MP: Remember that a 107% increase in the minimum wage from $7.25 to $15 an hour is the same as an annual tax on employers of $15,500 per minimum wage worker (plus additional payroll taxes paid by employers). That wouldn’t have any adverse effects on employment opportunities for low-skilled workers? Employers wouldn’t make any adjustments to counteract such a “$15,500 annual tax per worker” — like perhaps reduce the number of employees, reduce work hours assigned to their employees, and/or reduce non-wage fringe benefits? If you believe that, go directly to the purple area above.
