Thursday, July 26, 2007

Are Taxes The Cause Of All Human Misery?

Cafe Hayek's Donald Boudreaux has a great article up showing that prohibition was both enacted and repealed as a result of changes in the income tax.

The standard, schoolbook history of alcohol prohibition in the United States goes like this:

Americans in 1920 embarked on a noble experiment to force everyone to give up drinking. Alas, despite its nobility, this experiment was too naive to work. It soon became clear that people weren't giving up drinking. Worse, it also became clear that Prohibition fueled mobsters who grew rich supplying illegal booze. So, recognizing the futility of Prohibition, Americans repealed it in 1934.

This popular belief is completely mistaken. Here's what really happened:

National alcohol prohibition did begin on Jan. 16, 1920, following ratification of the 18th Amendment and enactment of the Volstead

Speakeasies and gangster violence did become familiar during the 1920s.

And Americans did indeed keep drinking.

But contrary to popular belief, the 1920s witnessed virtually no sympathy for ending Prohibition. Neither citizens nor politicians concluded from the obvious failure of Prohibition that it should end.

Fantastic stuff, read it your self.


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