Sin Tax Bill

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  • Topic: Tax, Regressive tax, Taxation
  • Pages : 4 (1230 words )
  • Download(s) : 166
  • Published : January 8, 2013
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Summary
Sumptuary taxes are ostensibly used for reducing transactions involving something that society considers undesirable, and is thus a kind of sumptuary law. Sin tax is used for taxes on activities that are considered socially undesirable. Common targets of sumptuary taxes are alcohol and tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested.[1] Some jurisdictions have also levied taxes on illegal drugs such as cocaine and marijuana.[citation needed] The revenue generated by sin taxes is sometimes used for special projects, but might also be used in the ordinary budget. American cities and countries have used them to pay for stadiums, while in Sweden the tax for gambling is used for helping people with gambling problems. Acceptance of sumptuary taxes may be greater than income tax or sales tax. Opposition to sin tax

Sin taxes have historically triggered rampant smuggling and black markets, especially when they create large price differences in neighboring jurisdictions.[citation needed] •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.[citation needed] •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.[citation needed] •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[2] and increasing the rate of people mixing their own drinks rather than...
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