Thursday, February 15, 2007

Sin Tax: Devil Sticks and Cash Flow

Below is an article that looks at the effects of a Sin Tax. Cigarettes are taxed heavily and are a great source of income for state governments but with recent increase in health awareness, smoking bans and some guilt/shame associated with firing up a square the sales of cigarettes are declining.

Great... This is a good thing right? less smokers mean less health related illness and fewer second hand smoke casualties and less strain on state run/subsidized health care. Despite the positive effects of fewer smokers there is one huge negative... Fewer tax dollars for education and other desperately needed programs.

My take on it is that sin taxes are great. The fact that this article is written is evidence that sin taxes work they discourage a behavior that is harmful to society and the individual and at the same time raise a little money for the state. The fact that tax revenues are decreasing because there are fewer smokers is a positive not a negative all it means is that another sin tax should take its place why not tax development on environmentally sensitive areas or better yet cell phone use in restaurants. In TN Gov. Bredesen is advocating for a higher tax on cigarettes to replace the sales tax on groceries. While there is not much of an argument for Sin Taxes being the primary form of state revenue I'm all for it as a secondary tax.

The article below sums up the debate pretty well so read it if your interested.


http://www.msnbc.msn.com/id/17170991/

4 comments:

Santo said...

Hey, how about a sin tax on gift card purchases?

Check out this story about a Seattle smoker who is being hassled by the State of Washington for $8,000 in back taxes for cigarettes he bought on the internet or out of state.

http://seattletimes.nwsource.com/html/localnews/2003574768_tobaccotax16m.html?syndication=rss

Santo said...

How about Minnessota's proposed "sin tax" on plastic surgery? (See link below. It's impossible to insert hypertext in a comment, so you have to copy and paste the URL into your browser.)

At least this one is intented to be progressive.

http://www.startribune.com/587/story/1011675.html

tpatch said...

Here is another article from the CA on Sin Taxes. After this I'll let it go.

http://www.commercialappeal.com/mca/editorials/article/0,2845,MCA_25348_5365716,00.html

tpatch said...

Try This:


http://www.commercialappeal.com/mca/editorials/
article/0,2845,MCA_25348_5365716,00.html