Restoring Optimality on American Past Times...

So today in class when we were discussing externalities and the inefficiency of competition with externalities i couldn't help but think of the tragedy that has recently just occurred throughout the lovely state of Ohio.

Yesterday, after a hectic morning of classes followed by a 7 hour shift at a local sub joint, nothing sounded better to me than a nice cold beer and a cigarette. On my walk home with a fellow co-worker I stopped into UDF and asked for my usual pack of Parliment Light. As the middle-aged cashier with an ungodly malocclusion (aka jacked teeth) told me the price I nearly wet myself. $6.25 is the new price. As some of you may know yesterday in the state of Ohio the taxes on cigarettes were increased yet again. There are several reasons for this, but being an economics student my mind goes to the idea of increasing taxes in order to restore optimality.

Thinking about this a bit more and trying to compare it to other issues we are facing, I start to remember about a story I heard on CNN last week. Senators from various states around the country have recently proposed a tax be placed on internet porn sites. The senators believe that these sites are "polluting" the internet which in turn can affect the children. The pornographic sites in this case would be a negative externality ( I understand we don't all feel this way), and the senators feel that because the polluter does not have to pay for the pollution, society is worse off. If a tax occurs, they predict that less people will use the sites while more money is being made from the taxes... God bless America for our politicians trying to earn that paper and believe that taxing will change the ways of our country.