Remember in elementary school when you’d get a sticker for turning in your homework. Why did that happen? Short answer: because stickers rock! Especially the one where you could scratch them and they’d smell good. OH, MAN! Grape was easily the best one and if you disagree, you’re wrong.
But seriously. Why did you get stickers for completing assignments? It’s because you were being incentivized to continue to complete assignments.
Incentive structures have been instrumental in reward systems since the dawn of humanity. That’s because incentivizing things, in almost every case, means you get more of whatever it is that you’re incentivizing.
On the other hand, if you punish someone for something, you tend to get less of that thing. I’m fully aware that this is the most rudimentary of human principles but I’m getting at a point.
Have you ever tried to buy cigarettes?
If you have, what’s something you’ve noticed? Is it the taxes? I’m not a smoker but even I’ve noticed the INSANELY high taxes that come with cigarettes. Why is that? Well because we as a people have decided that smoking is bad and therefore have created a punishment (taxes) for people who do it. Now maybe you think that’s a good idea and we should increase taxes on cigarettes. The point I’m making is that if you tax something, the idea is you get less of it.
Taxes have been used to scare people into compliance forever.
On the other side, if you subsidize something, you tend to get more of it. Government (purposefully or not) rewards behavior that ought not to be rewarded. In other words, when you subsidize something, you inevitably get more of it. Consider the effects of taxes and subsidies the next time you choose to “seek to tackle” social issues.
The best example is welfare.
Since its inception, the US welfare system has gotten more and more bloated with more and more Americans feeling the need to receive some sort of government aid.
If you subsidize something, you’ll get more of it.
