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/