A sin tax is a kind of sumptuary tax: a tax specifically levied on certain generally socially proscribed goods and services, for example alcohol and tobacco, candies, soft drinks, fast foods, coffee, and gambling.
About the Sin Tax Law.
Sin tax law is a kind of Sumptuary Tax. A tax specifically levied on certain generally socially prescribed goods and services, for example alcohol and tobacco, candies, soft drinks, coffee, gambling
Some argue that tobacco and alcohol consumption or the behaviors associated with consumption or both are immoral, or "sinful", hence the label "sin tax". By raising the cost for certain products (here called immoral), they aim to force change upon people's behavior.
Tobacco and alcohol consumption has been linked to a variety of medical problems. In the United States alone, over 440,000 people die annually from smoking tobacco.
Following the medical argument, some argue[who?] that consumers of tobacco and alcohol cause a greater financial burden on society by forcing others to pay for medical treatment of conditions stemming from such consumption, especially in most first-world countries with government-funded healthcare, and should be taxed extra to pay for the costs of their treatment.
Adam Smith supported the medical and moral arguments in The Wealth of Nations: “It has for some time been the policy of Great Britain to discourage the consumption of spirituous liquors, on account of their supposed tendency to ruin the health and corrupt the morals of the common people. Not all research supports the idea that alcohol and tobacco consumers financially burden societies. One study used a mathematical model to compare estimated health costs of obese persons, tobacco smokers, and "healthy-living people". Until age 56, obese persons had the highest estimated annual health expenditure. Tobacco smokers older than this had the highest estimated health costs of all groups, but since life expectancy is shorter for smokers and the obese, the "lifetime health expenditure was highest among healthy-living people." The model for this study used input parameters based on data from the Netherlands. Opposition to sin tax
* Sin taxes have historically triggered rampant smuggling and black markets, especially when they create large price differences in neighboring jurisdictions. * Critics of sin tax argue[who?] that it is a regressive tax in nature and discriminates against the lower classes, since taxation of a product such as alcohol or cigarettes does not account for ability to pay, therefore poor people pay a greater amount of their income as tax. * Sin taxes are not normally value added in nature meaning that expensive, high-quality products more likely to be purchased by the wealthy will have the tax comprise a much smaller proportion of its final purchase price, thus ensuring that the lower classes pay a much greater proportion of their lower income in tax. * Sin taxes fail to affect consumers' behaviors in the way that tax proponents suggest, for instance increasing smokers' propensity to smoke high-tar, high-nicotine cigarettes when the per-pack price is raised  and increasing the rate of people mixing their own drinks rather than buying pre-mix alcoholic spirits. * Critics[who?] also argue that the behavior affected by sin taxes are strictly personal and of no social consequence, and therefore should not be moderated by government.
Definition of 'Sin Tax'
A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. These type of taxes are levied by governments to discourage individuals from partaking in such activities without making the use of the products illegal. These taxes also provide a source of...
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