Problems With Raising Taxes On Alcohol And Tobacco

1984 Words Feb 7th, 2018 8 Pages
Different strategies to do so have been tried and rejected, but one of the most controversial has been the proposal to increase taxation on alcohol and tobacco since these are contributory factors to spiraling medical costs. Supporters support this motion but critics argue that it has little impact if any on the cost of medical insurance itself (e.g. Oberlander, 2008); particularly since taxation on these production will usher in a host of other problems.
The history of the issue on whether taxes on alcohol and tobacco should be increased can be traced back to 1994 when a cigarette excise tax increase was suggested to help in funding part of the President's universal health care program. The proposal, which suggested an excise tax increase of 75 cents per pack of cigarette, received considerable public support. This proposal was based on the argument that such taxation could generate nearly $11 billion annually and be relatively simple to administer because it would enhance the current manufacturer's excise tax on these products (Gravelle & Zimmerman, 1994). In the President's budget for 1995 financial year, it was emphasized that such taxation would assist in catering for extra healthcare costs of smoking and help in discouraging people, especially the…
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