> The problem is that the people making the decision on what to tax don't always have agendas that are altruistic. Elected officials can't be trusted to decide what's 'right' for me to consume or not to consume.

I agree that their agendas are often problematic, but then again people can't exactly be trusted to decide what's good for them either. Regulating food may be too much, but check out things like e.g. vaccines, effectiveness of which depends on everyone who can taking them, whether they like it or not. For the most prominent examples of people who absolutely should not be let to decide what they can or cannot do, see drivers. The flippant attitude to traffic laws is what causes lots of unnecessary deaths and injuries, as well as economic losses in unnecessary traffic jams.

> If it costs 'society' more, then charge people for the actual cost at the time the cost is incurred.

It's complicated. Sometimes charging at the point of purchase is exactly the right way. For instance, taxing fuel is a good idea, because it's directly related to the environmental damage it causes. A CO₂ emission tax would be a great way to internalize the cost of externalities, have the price reflect the true costs for everyone.

Other times, it may be a choice between what's "most free" and what's most effective. You're right that as a responsible person you should not be punished for irresponsible actions of the few. It seems fair to put the cost of e.g. alcoholism on the people who actually suffer from it. But I'd argue that in practice, it's too late. The goal should not be to wait for the irresponsible people to get in trouble, but to prevent them from it in the first place. Prevention is more effective than a cure; not to mention that there's no point in charging an alcoholic extra for treating liver failure - they won't be able to pay it anyway.

By the way, how is the society supposed to know that you are the responsible person and you won't become an alcoholic? It can't. Some people become alcoholics every year and others don't, but we can't tell beforehand who will be in which group. So the simple approach will be probabilistic - assuming that everyone has the expected-number-of-alcoholics/total-alcohol-consumers probability of becoming one, and taxing this fraction of the costs out of everyone. Where to best put that tax? On alcohol purchase directly; that way you fairly exclude people who don't drink at all, and thus will never cause costs to other people because of an alcohol problem. Could we make it "more fair"? Probably, by means of making it more complicated. But complicated means overhead and inefficiency, which is something you want to limit too.

Finally, I disagree with the idea that the government has no business telling you what you can or cannot do. I get that it has to be limited as much as possible for citizens to be happy, but in the end, bossing people around is the sole and only reason we have a government. It's their raison d'être. Solving coordination problems and seeking globally optimal outcomes involves infringing on peoples' individual freedoms - or to turn it around, living in a society involves giving up some of individual freedoms. It's the so-called social contract.