To Increase the Sin Tax Would Be a Sin
ENG 122 English Composition II
April 1, 2013
To Increase the Sin Tax Would Be a Sin
When random citizens are asked today what their opinion is of taxes, more than likely their response would be they pay too much. Taxes continue to increase on just about anything that is purchased. The pockets of American people are being drained by dozens of different taxes. Sin taxes are just one of these taxes. Sin taxes on alcohol and tobacco should not be increased to cover rising medical costs because taxes should be based on income not vices.
An increase in sin taxes does not just affect the individual with the addiction. Increasing the sin taxes on alcohol and tobacco simply to cover rising medical costs would have an adverse effect on every household member. If the head of household is addicted to either of these vices, and is also the individual in charge of the household budget, monies that would normally be allocated for other expenses are spent on the increased tax instead (Black, et al., 2006). Each member of the household is going to suffer. This is true for every income group. It does not matter how much excess money is left over at the end of the month. An increase in sin taxes for both tobacco and alcohol would have an effect on every household. For the lower income households the extra sin taxes could mean the difference in whether or not the rent is getting paid for the month, or if there is going to be food in the table. Those in favor of increasing the sin taxes are not thinking that this extra money that is now a tax would be better spent on basic living expenses.
The other household members can suffer through the re-allocation of the household budget to make the alcohol and tobacco purchase, or through higher health care expenses caused by substituting cheaper and lower quality alcohol and tobacco products for higher quality products. If the tax is going to increase and the addict is still going to make the purchase, they may look for less expensive alternatives that actually can cause greater long term health problems and increased medical costs. If there is a lower quality product out there and available, the addict may opt to purchase that instead. The goal is to reduce rising medical costs and the costs are going to continue to rise if the addict is looking for a lower priced alternative. Lower price generally means lower quality. This can easily result in higher health care expenses. The re-allocation of the household budget can mean less money spent on basic necessities. The other household members are suffering because of the increase in tax.
Available evidence indicates that smokers and drinkers among low and middle-income groups are generally more sensitive to price increases than those from high-income groups (Black, 2006). A given tax increase raises some important questions about welfare. It only makes sense. Individuals in low and middle-income groups have less expendable income. An increase in sin taxes in tobacco and alcohol is going to have a greater effect financially than those in higher-income groups. The excess burden of the tax increase will hit poor smokers and drinkers harder than their rich counterparts. A uniform tax hike like this would discriminate between individuals and groups.
Low and middle-income smokers and drinkers are already at a disadvantage financially. These individuals have a reduced amount of spendable income available to them. Increasing a sin tax on alcohol and tobacco will be harder for these groups to swallow.
A sin tax is disproportionate. The tax on a bottle of wine is the same regardless of the cost of the bottle of wine, so those purchasing top-shelf liquor (or premium cigarettes) pay a smaller portion of the price in taxes. Those who least can afford the taxes are paying the same amount as those who can clearly afford the tax. Poor people don’t drink more...
References: Baxandall, P. (2003). Taxing Habits. Retrieved March 11, 2013, from
Black, P. A., & Mohamed, A. I. (2006). 'Sin ' Taxes and Poor Households: Unanticipated Effects.
South African Journal Of Economics, 74(1), 131-136
Risks of smoker surcharge. (2006, Feb 26). Los Angeles Times, pp. 0-C.2. Retrieved from http://search.proquest.com/docview/422039766?accountid=32521
Tiihonen, J., Ronkainen, K., Kangasharju, A., & Kauhanen, J
Please join StudyMode to read the full document