Sin Tax Essay

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Sin Tax When a consumer good is deemed socially unacceptable by congress, it may have a sin tax placed on it, a tax meant to reduce the total consumption of the product, or to increase tax revenue for a government. It affects goods that can cause bodily harm through ingestion, such as tobacco and alcohol, and more recently food items that are sugary and/or fatty, but also includes gasoline and bullets. A sin tax is in addition to any sales tax already imposed on the good. As consumers, we are affected by different sin taxes in daily life; prices are elevated to an artificially high level, in some cases to force the consumer to make a healthier lifestyle choice. An example with a long history in the United States is the excise tax imposed on tobacco. While first attempted by Alexander Hamilton in 1794, but not officially passed by congress until 1862, an excise (sin) tax was originally placed on tobacco as a revenue source for our government, in debt from the civil war. All 50 states have levied a sin tax against cigarettes, although not all have additional taxes on smokeless tobacco or cigarettes. As the health risks associated with smoking tobacco products became much more apparent, the sin tax was increased in order to lower the total consumption, rather than simply remain a revenue source. Public health officials have stated that a 10% increase in the price of a pack of cigarettes can lower consumption by as much as 7% in youths, while critics have pointed to data showing that instead of stopping consumption, smokers have simply switched to cigarettes with more nicotine and a longer burn time, actually increasing the total amount of tobacco consumed. The excise tax that may be placed on sugary goods is more unique than the other sin taxes. While the majority of the other sin taxes were placed originally to raise revenue for the government, the tax on

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