Disadvantages Of Sin Tax

The issues of taxation

even though the author of this article talks in particular about excise taxes, this initiative will eventually affect the buyer because they will have to pay more for the this products they are consuming. In class, we have a discussion on sales taxes and the incidence of tax. Even though cigarette distributers are required by law to pay this tax, the consumers of cigarettes are going to end up paying more for the increase of taxes. Therefore, this article is also related to the legal and economic incidence of a

3. Pollution is considered by most a negative externality. Some economists would like to see the costs of these burdens incorporated into the price of goods that we buy. For instance, since coal fire power plants increase emissions that could potentially lead to climate change, these economists believe that the price we pay for electricity is not adequately high enough. Draw a completely labeled graph and illustrate on the graph how much higher electricity prices would be if the full costs of electricity production were taken into account. You do not need to provide actual numbers; rather, show on the

John Stuart Mill and Sarah Conly have opposing views on the necessity and justifiability of paternal coercion in a state. This essay will present their views regarding the justifiability of state intervention in the case of sugar tax. I will show what arguments both would use to justify their own opinion and at the end present my own arguments in order to argue that sugar tax would not be the ideal solution but coercive paternalism would still be necessary, although used in a slightly different way.

if there is a high “sin tax” (i.e., taxes levied on goods such as alcohol and tobacco products that are

Nick Gillespie. "The U.S. Should Implement a Sin Tax to Increase Budget Revenue." Opposing Viewpoints: The Federal Budget. Ed. Amanda Hiber. Detroit: Greenhaven Press, 2010. Opposing Viewpoints Resource Center. Gale. Bucks County Community College-OVRC.

Tax implications and its effect on alcohol consumption were studied in detail in working paper 8962. This study was done in Canada. What the writer found was that higher tax rates for cigarettes wouldn’t stimulate alcohol consumption as a replacement habit. When smuggling was factored into the equation, it was found that in Canadian smuggling could have increased both cigarette and alcohol consumption.

a It has declined. The state now owns less of the country’s housing stock. b That the state thinks there is less market failure in the housing market now than in 1979. use. Figure 1 shows that drivers do not initially pay for the negative externalities (external costs) they generate. A tax equivalent to the marginal external cost would push price up to PX. Road use would be reduced from Q to QX, the socially optimum level. In practice, it is difficult to estimate external costs. d Congestion and other negative externalities caused by car use will increase. Road use by cars is likely to continue to increase in the absence of

The result is an unfair distribution of impacts that does not maximize social surplus. Weimer and Vining call externalities a “missing market” (p. 92). It is feasible to imagine externalities being accounted for by a private market, in cases where, for example, an externality is manifested into a change in land value. However, these cases are exceptional. Governmental must typically step in to value externalities, such as charging fines for polluting industry, in order to account for social costs and benefits.

In conclusion, the consumption of cars creates both positive and negative externalities. However the negative externalities it is more than its positive externalities so producers tend to overvalue and over produce. The government tries to intervene by imposing taxes on the production of cars. However this is not usually effective as the imposion of taxes depends on the elasticity of the product.The demand of cars is not price elastic.

These young adults but because the product is cheap, so if the prices were to rise then there would lead buying of the product. In the online article Bad Food? Tax It, and Subsidizing Vegetables in the New York Times written by Mark Bittman, he addresses that, "taxes would reduce consumption of unhealthful foods... That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit" (Bittman). These young adults buy because it's addicting and cheap so raising the prices would help. Taxing stuff like harmful beverages or junk food can avoid people from becoming overweight and obese. Stephens claims, "The freedom of living alone, without parents, creates a situation in which individuals can consume alcohol freely." So taxing these items would not completely get rid of the amount of these adults buying alcohol, but the number of consumption would most likely decrease

From an economic standpoint, it’s surely possible for laws to be too strict against dangerous and immoral activities as defined by social perceptions. To begin, these hazardous practices are driven to be deemed illegal because of the risks that follow from participating in said actions, and ultimately, the government wants to offer a safer society. Nonetheless, a right tradeoff is required to achieve an economically efficient level of safety where the marginal costs equate the marginal benefits of increased safety. Similarly, economic efficiency can be achieved if the marginal benefits exceed the marginal costs of heightened safety. This is achieved when consumers are informed of the monetary value of increased safety, such as understanding the costs of

Health is widely diversified in the United States because of the best resources available by the health care systems in hospitals. New inventions are being developed every day, and billions of dollars have been spent to increase the level of health care while lowering the cost of insurance so hospitals can offer the best treatment. Meanwhile, there are people in our society who are excessive smokers and drinkers, and these limitless behaviors have an effect on the cost of insurance and hospital services. The taxes received from products such as cigarettes and alcohol are referred to as ‘Sin taxes’ -- due to the harmful effects that these products have on your health, and due to the increased medical cost for government. Smoking has been the leading cause of high risk problems such as heart attack and lung cancer, and people still continue these unhealthy habits which can lead to hospitalization and even death. The consumer of these products should feel the pinch of paying high ‘sin taxes’. Therefore, the government should increase taxes on alcohol and tobacco to help pay for the rising cost of medical expenses.

As seen from both Figure 2 and Figure 3, the application of negative externality of consumption is appropriate, as it clearly indicates the before and after results of the implementation of the tax. As clearly shown, overconsumption leads to social inefficiency, but by applying a tax, a decrease in the consumption of plastic bags can allow for a shift of the market. The increase in social efficiency also allows for social cost and benefit to be equal. By applying taxes on the plastic bag negative externality it allows for a reduction in the supply of plastic bags. Due to this tax, the supply curve S1 will shift upwards to S2. This will inherently also reduce the gap between Qefficient and

The most confusing and controversial element when considering sin taxes is the definition of sin.