Vice taxes!

"The highest tax was upon men who are the greatest favourites of the other sex, and the assessments according to the number and natures of the favors they have received; for which they are allowed to be their own vouchers."

Jonathan Swift, in Gulliver’s Travels, about the taxation system in a place called Laputa (via Freakonomics)

With the Great Recession showing no signs of abating and with governments facing declining revenues and financing challenges like these, some local governments across America are digging out newer revenue sources. Freakonomics again points to efforts to tap revenues by relaxing restrictions on vices and then controlling them by taxation.

1. Congress may overturn a four-year-old ban on Internet gambling in order to tax it.
2. In California (and elsewhere), marijuana is becoming increasingly available, and is being taxed accordingly.
3. Hard-hit local governments are loosening alcohol restrictions in airports to raise tax revenue.
4. Nevada lawmakers have proposed a $5 tax on acts of prostitution in the state, an act that would effectively legalize prostitution across the state.
5. However, the Obama administration's attempts to impose a tax on sugary soft drinks to fight obesity and provide billions for health care reform appears to have gone into the cold storage for now.

The Great Recession appears to have brought back to vogue the capitalist way of addressing vices!