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Do “sin taxes” work?
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Re: Do “sin taxes” work?
#72Of course, as far as governments are concerned whether such taxes reduce "sinful" activities is irrelevant, so long as they increase tax revenue and allow politicians a way to improve their public images.
Raising revenue in ways that constituents find less objectionable is a good thing.
Re: Do “sin taxes” work?
#73“smokers tend to die earlier, meaning that they probably save governments money since they draw less from state pensions.”
Wow, that’s some furious hand-waving assumption if I’ve ever seen any. Smokers die of cancer, which costs a boatload, and smoking removes people prematurely from the workforce.
Took less than two seconds to find well studied contrary evidence:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4502793/
https://web.stanford.edu/group/sjph/cgi-bin/sjphsite/the-eco...
It appears that the idea that early death is a net economic positive is actually smoking industry propaganda: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1120774/
Re: Do “sin taxes” work?
#74Earlier quoted context omitted.
Smokers cost the health care system less because they die younger: https://bmjopen.bmj.com/content/2/6/e001678
They cost more money per year to keep alive while they're dying, and they contribute less to the economy (because they die early). The indirect costs of their mortality are far greater than the direct savings.
Apart from health care pending it is good to also take into account pension savings https://www.cbsnews.com/news/philip-morris-admits-terrible-m...
Re: Do “sin taxes” work?
#75From the article: Sin taxes are blunt policy instruments. People who only have the occasional drink are not taking on any great health risks, yet they are taxed no differently than serious alcoholics. But surely the alcoholics are taxed way more than people who have an occasional drink because of the sheer volume? If you drink or smoke a lot, the taxes do accumulate into significant amounts annually. Policymakers sho…
Yes, they certainly work as taxes.
> Further, if alcohol taxes bring in 1% of the state budget it means everyone's income is that much lower because of taxing alcohol.
Maybe you mean "that much higher" there?
Also, just FYI, in 1923 "[s]ome 30 percent to 40 percent of the government’s income came from the tax on alcohol."[0] So Prohibition was funded by the federal income tax. But now we have both :(
0) https://taxfoundation.org/how-taxes-enabled-alcohol-prohibit...
Re: Do “sin taxes” work?
#76>Some policymakers argue that people who engage in unhealthy habits also impose negative externalities, since they tend to present taxpayers with bigger medical bills. In practice, however, these costs tend to be overstated.
citation needed.
Re: Do “sin taxes” work?
#77Earlier quoted context omitted.
But they should be aware that the bulk of the damage that smokers, drinkers and the obese do is to themselves, and not to others Unless you have a functional health care system, in which case increased costs are passed on to everyone's taxes. It would be appropriate to dedicate revenues from tobacco and alcohol taxes to medical care. Sin taxes are taxes that fall only on the users of the products or services in quest…
Providing a minor source of income is usually considered unethical and illegal. Minimum wages were adopted explicitly to curtail piecework that paid only a few pennies per item. Recycling programs knowingly target the most vulnerable in society to work without protections like minimum wage, overtime, and health insurance. Yet it seems they have political support from many of of the same people who advocate labor prot…
Only people who are not served by better programs will spend time picking up cans for recycling value.
I can simultaneously want to make sure that nobody goes hungry or homeless, and still recognize that we aren't doing that today, so in the meantime having that recycling income available is better than not having it.
Re: Do “sin taxes” work?
#78Earlier quoted context omitted.
If policy makers are concerned about potential regressive effects, they could take the revenue earned and apply it towards helping the poor. One "easy" method is lowering the bottom tax bracket - in the US they could cut the explicitly regressive payroll tax.
Social security (the large majority of the payroll tax) is highly progressive when paid out and then taxed.
This isn't a critique of social security payouts -- other than political expediency, there is no particular need to couple the payments with the current payroll tax source.
Re: Do “sin taxes” work?
#79“smokers tend to die earlier, meaning that they probably save governments money since they draw less from state pensions.” Wow, that’s some furious hand-waving assumption if I’ve ever seen any. Smokers die of cancer, which costs a boatload, and smoking removes people prematurely from the workforce. Took less than two seconds to find well studied contrary evidence: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4502793/…
> “smokers tend to die earlier, meaning that they probably save governments money since they draw less from state pensions.”
OK, let's call the above sentence "the claim". Looking at the nine "Main Results" of your first link, the authors do not directly address the claim, they just choose to focus on something different (all emphasis mine):
> We conclude that the direct costs and externalities to society of smoking far outweigh any benefits that might be accruable at least when considered from the perspective of socially desirable outcomes (ie, in terms of a healthy population and a productive workforce)...
> Apart from the income benefits of tobacco smoking, another source of benefit, especially to the government, of smoking is the substantial cost savings in pension payments from premature death of smokers. This is a highly debated issue in the literature, because it is premised on the thinking that a shorter life expectancy implies a reduced expenditure on pensions. Thus, attempts to promote this will be deemed socially undesirable and hence cannot be incorporated into social policy design.
Note that they don't give a figure for the total savings on pensions, which suggests to me that they know it's very large. They only number they give is
> Manning et al. have estimated that every pack of cigarettes smoked reduces the life expectancy by 137 minutes and pension costs by $1.82.
If we go to Manning et al, we find
> Although nonsmokers subsidize smokers' medical care and group life insurance, smokers subsidize nonsmokers' pensions and nursing home payments. On balance, smokers probably pay their way at the current level of excise taxes on cigarettes...In contrast, drinkers do not pay their way...
https://www.ncbi.nlm.nih.gov/pubmed/2918654
Your second link does not address the claim. And your last link doesn't attempt to rebut the industry-funded results they discuss.
I have no idea what the right way to think about this topic is, but you've hardly given a definitive answer.
Re: Do “sin taxes” work?
#80Earlier quoted context omitted.
But they should be aware that the bulk of the damage that smokers, drinkers and the obese do is to themselves, and not to others Unless you have a functional health care system, in which case increased costs are passed on to everyone's taxes. It would be appropriate to dedicate revenues from tobacco and alcohol taxes to medical care. Sin taxes are taxes that fall only on the users of the products or services in quest…
Providing a minor source of income is usually considered unethical and illegal. Minimum wages were adopted explicitly to curtail piecework that paid only a few pennies per item. Recycling programs knowingly target the most vulnerable in society to work without protections like minimum wage, overtime, and health insurance. Yet it seems they have political support from many of of the same people who advocate labor prot…
Does that frame of reference make sense for a recycling program though? The deposit system is a zero sum system that isn't designed for the purpose of making money - the deposit is to discourage consumers from throwing recyclables away and instead get their money back.
It seems like more of a side effect that low income workers use it as an income stream more than anything. It's like a metaphorical form of picking up loose change that others have dropped and deemed not worth their time to pick up.