New Taxes in Massachusetts

Today's Boston Globe reports:

Governor Deval Patrick said yesterday that he had come up with a way to pay for more police officers in Massachusetts: charge convicted criminals a fee. Unveiling his most detailed account yet of his plans for next year's state budget, Patrick said he would propose a "safety fee," which every person convicted of a crime would have to pay.

This fee can be viewed as a Pigovian tax on crime externalities. (It reminds me of the old quip, "A fine is a tax for doing something wrong. A tax is a fine for doing something right.")

Like many Pigovian taxes, this one is being criticized as having bad distribution properties:

Reacting to Patrick's announcement, advocates of prisoners' rights said the plan was unfair. Leslie Walker, executive director of Massachusetts Correctional Legal Services, which represents inmates, said about 85 percent of convicted criminals in Massachusetts earn less than $11,000 a year at the time of their convictions.

Another one of Patrick's proposals is less attractive from the standpoint of economic efficiency:

Patrick also pledged to support legislation that would allow cities and towns to hike the state's 5 percent meals tax to as much as 8 percent.

My guess is that restaurant meals have a large elasticity of demand (meals at home are a good substitute) and a large elasticity of supply (restaurant space can be converted to other business uses, and the labor can be redeployed to other industries and states). With a large elasticity of demand and a large elasticity of supply, a tax on this market would entail a particularly large deadweight loss.