Problems With Raising Taxes On Alcohol And Tobacco

The subject of insurance and how heavily the government can mandate it or not mandate it is a constant struggle in politics. There is always the question of “what kind of relationship should the government have with its people and what role should it play with businesses?” Currently, a popular subject is the Affordable Care Act (Obamacare) and it is challenging the boundaries by requiring people to have health insurance and requiring businesses to offer health insurance to everyone and anyone. Mandating insurance is a hot button subject in other areas too that we will discuss like auto insurance, workers’ compensation insurance, and professional malpractice insurance.

“The amount people pay for health insurance increased 30 percent from 2001 to 2005, while income for the same period of time only increased 3 percent.” (Source: Robert Wood Johnson Foundation). The rising cost of healthcare is a huge problem in America today. In this paper I will analyze the different issues and causes for the increase in cost.

This article is very informative toward the purpose of increasing excise taxes. I believe that Joey Connor did an excellent job at pointing out the effects of the tax increase on tobacco products. He provided information on previous tax rates, so readers can have a clear idea of the increase percentage of taxes. He also supported his arguments by incorporating other sources in his article. For instance, he incorporated the analysis done by the National Public Radio on how the increase in price of cigarettes will affect the consumer behavior.

Universal health care coverage represents a fundamental shift in health care policy in the United States and does not have widespread support among Republican members of Congress. Moreover, unlike President Obama’s health care reform element of reducing health care costs, universal health care coverage will require large increases in spending from the federal government, likely necessitating higher taxes. President Obama’s proposal to provide coverage for the 47 million Americans who were uninsured as of January 2008 is estimated to cost $102 billion per year. Gruber, J. (2008). Covering the Uninsured in the U.S. Retrieved June, 2010 from http://econ-www.mit.edu/files/2517.  As the number of uninsured Americans continues to increase, so does the cost of providing universal coverage.

Throughout the progression of our society we have been faced with extensive public policy issues that impact our country as a whole. Today, rising health costs in the United States has become one of the biggest threats to our essential growing economy. Rising health care cost has “trickle-down effect”, when private healthcare insurance companies raise insurance premiums. Companies that subsidize these premiums for their workers our then forced to raise prices. American companies then sequentially struggle to compete with countries on the global market. Another issue that significantly affected the rising cost in America is the uninsured and underinsured. In an effort to cover cost for underinsured patients’ hospitals raise costs for paying

If 90% of United States smokers could have another chance to redo it, they reported that they would not even have their first puff that initiated their tobacco addiction (Winickoff, Gottlieb, and Mello 2014). The Tobacco 21 bill is a fairly new legislation and already it has shown a decline in underage smokers as a result of its implementation. The results of the survey presented that the public opinion was largely accepting and supportive of the bill. The main argument against the bill is the harm that will come to retailers of tobacco products. Correspondingly, the argument is proven inaccurate and in favor of the bill. The past has shown the improved outcome of the country from the raise in the minimum alcohol age, and researchers regard

History has proven that government penalties, in the form of taxes, deter smoking. The 2000 U.S. Surgeon General’s Report, Reducing Tobacco Use, found that raising tobacco-product prices decreases the prevalence of tobacco use, and tobacco tax increases produce significant long-term improvements in health. From its review of existing research, the report concluded that raising tobacco taxes is one of the most effective tobacco prevention and control strategies (7). Along with price increases, mass-media campaigns and smoking bans have made cigarette smoking pretty much unacceptable in today’s society. “Today, approximately 22 percent of adults age twenty-two and older are smokers, compared with 33 percent in 1979” (Thorpe 1440). It is clear, from these examples, the use of penalties to deter the unhealthy behavior of smoking is a successful intervention.

When presenting the federal budget, the liberals placed in effect increase tax increase on tobacco and alcohol.

We don’t have just a single body which takes charge of healthiness in this country. Both physicians as well as insurance firms get a ridiculous amount of incomes from consumers. The government control to some extend through the financing of Medicare and Medicaid but relies on the private sector for the provision of services (Shi, L., & Singh, 2010).All arguments on finding solutions to insurance problems enthuses unlimited urge. Problems like making health care facilities accessible, organizing coverage’s, and to rein in expenditure by federal, organizations, and individual entities repeatedly stands out.

Universal health care has been a debated issue in the U.S. for decades. Due to the recent failure of the Affordable Care Act (or Obamacare), this has led to Donald Trump’s plan to repeal and replace it. One may say that health insurance is expensive, and not everyone can afford it. The government should provide everyone with access to health care. However, others may say that it is not fair. The government should not pay for people who do not take care of themselves, such as smokers. Although free health care is a basic human necessity, actually there’s still the issue of paying it off because health care, in reality, is not really “free” and still needs an alternative to fund the program, could lead to possible abuse to the system and further government debt.

The article Health Care Reform and Cost Control details the future impact of taxes. Eventually, taxes will decrease health care insurance cost. The analysts predicts that the health care will be effective. In a long term, it will cost

California's legislative experience exemplifies the role of tobacco interests. For instance, Proposition 99, an initiative petition for a 25-cent growth in tobacco tax per package with additional profit devoted to study, needy care, and anti-tobacco education, was accepted by the voters in 1988 only after long and unsuccessful attempt to development tobacco taxation and community education about tobacco over federal regulation (Chaloupka, Straif, and Leon, 236). Fearing the innate power of anti-smoking education, tobacco interests have worked to reduce the percentage of the monies allocated to the public education campaign that has contributed to the strong decline in smoking prevalence. The tobacco industry has recruited surprising allies,

Jim Anthony raises the question where are the affected cases more likely to be found with respect to characteristics, conditions, and processes of person, place and time? In regard to location, these aspects will be covered predominantly at the state level, given the pertinent tobacco tax policy discussions. However, we will also explore what is occurring at the local and regional level.

One of the primary goals of the Cadillac tax is to reduce the growing costs of national health care (Lowry 2015). The government is hopeful that implementation of the Cadillac tax will reduce overall health care expenditures and impede the growth of health care costs by encouraging a change in consumer behavior through discouraging the provision and obtainment of overly generous health coverage plans (Herring, 2011). Generally, individuals who are insured spend greater amounts on health care than those who are not as they can consume greater amounts of healthcare with a lesser personal burden. In the case that the insurance provided to an individual is overly generous, it encourages over spending on health care due to the fact that they incur a only a portion of costs of consumption. In this manner, the consumption of an inefficient amount of health care is perpetuated by the provision of overly generous health care coverage. This inefficiency and associated increase in demand for healthcare causes the price of healthcare to rise, which exacerbates the undesirable growth in national health care costs (Gravelle, 2015). The Cadillac tax aims to discourage the provision and obtainment of overly generous health care coverage by employers in an effort to decrease inefficient over-consumption of health care and stagnate the growth in healthcare costs. The intent of the Cadillac tax is to alter consumer behavior to decrease the provision of unnecessarily

Over the past few decades, universal healthcare insurances offered by several governments in developed countries, particularly Western European countries, have been one of the greatest policies to deal with the challenges of tremendous expenses and unpredictable demand in healthcare services behind the principle that the insurances are practical economic plans for states to share the risk to every citizen equally and alleviate individuals from the monetary difficulties of sickness (WHO, 2002). However, inevitably, those governments have suffered the financial restrictions from the scheme. The healthcare expenditure, especially drug prescription cost has been risen by leaps and bounds, and has led to economic tension (Sinnott et al., 2013a).