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A sin tax is an excise tax specifically levied on certain goods deemed harmful to society and individuals, for example alcohol and tobacco, candies, drugs, soft drinks, fast foods, coffee, sugar, gambling, and pornography. In contrast to Pigovian taxes, which are to pay for the damage to society caused by these goods, sin taxes are used to increase the price in an effort to lower demand, or failing that, to increase and find new sources of revenue. Increasing a sin tax is often more popular than increasing other taxes. However, these taxes have often been criticized for burdening the poor, taxing the physically and mentally dependent, and being part of a nanny state.
Sin tax is used for taxes on activities that are considered socially undesirable. In many cases, sumptuary taxes are implemented to mitigate use of alcohol and tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested; see soda tax. Some jurisdictions have also levied taxes on recreational drugs such as marijuana.
Revenue generated by sin taxes supports many projects imperative in accomplishing social and economic goals. American cities and counties have utilized funds from sin taxes to expand infrastructure, 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.
- Proponents argue that the consumption of tobacco and alcohol, the behaviors associated with consumption, or both consumption and the behaviors of consumption, are immoral or "sinful", hence the label "sin tax". For example, Mayo Clinic anesthesiologists Dr. Michael Joyner and Dr. David Warner support increasing taxes on tobacco and alcohol, with the goal of using tax codes to help change behavior and improve health.
- Tobacco and alcohol consumption has been linked to a variety of medical problems. In the United States alone, over 440,000 annual deaths are considered to be related to smoking tobacco. A synthesis of 67 studies found that there was evidence indicating tobacco taxation is responsible for "reducing smoking behavior among youth, young adults, and persons of low socioeconomic status, compared to the general population," although no evidence was found indicating this was true for long-term smokers or American Indians.
- Following the medical argument, 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.
- The moral, medical and financial arguments are occasionally considered in contemporary news settings.
- Sin taxes have been linked to smuggling and black markets of the taxed products.
- Critics of sin tax argue 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 share of their income as 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.
- The government may become reliant on the revenue from the tax and have to encourage "sinful" behavior in order to maintain the revenue stream.
- Taxes collected this way often don't go to the promised programs or often to self-defeating programs. For example, many cities[who?] increase the tax on cigarettes and claim it will go towards stop smoking campaigns[ambiguous].
- Sugary drink tax
- Meat tax
- Consumption tax
- Land value tax
- Müskirat resmi
- Pigovian tax
- Taxation and regulation of alcohol production
- Tobacco tax
- Staahl, Derek (21 April 2017). "Bill would block porn on new phones, computers unless consumers pay a tax". AZfamily.com. Retrieved 11 July 2017.
- Hartocollis, Anemona (9 April 2009). "New York Health Official Calls For Tax On Drinks With Sugar". The New York Times. Retrieved 27 March 2010.
- Hollenbeck, Brett; Uetake, Kosuke (2021). "Taxation and Market Power in the Legal Marijuana Industry". RAND Journal of Economics.
- Bennett, Cory. "Proposed 'Sin Tax' on Cigarettes Sparks Hope for Preschools". National Journal. Archived from the original on 21 February 2015. Retrieved 21 February 2015.
- Trickey, Erick. "Sin tax extension would push public funding of stadiums past $1 billion". clevelandmagazinepolitics.blogspot.com. Retrieved 21 February 2015.
- Perry, Susan. "Mayo doctors propose higher — and new — 'sin taxes'". Minn Post. Retrieved 21 February 2015.
- "Frequently Asked Questions on the Passage of the Family Smoking Prevention and Tobacco Control Act (FSPTCA)". FDA. 10 August 2009. Retrieved 27 May 2010.
- "Alcohol and Tobacco". National Institute of Health. Retrieved 21 February 2015.
- Bader, P; Boisclair, D; Ferrence, R (2011). "Effects of tobacco taxation and pricing on smoking behavior in high risk populations: a knowledge synthesis". Int J Environ Res Public Health. 8 (11): 4118–39. doi:10.3390/ijerph8114118. PMC 3228562. PMID 22163198.
- "Drug abuse costs the United States economy hundreds of billions of dollars in increased health care costs, crime, and lost productivity". National Institute of Drug Abuse. Retrieved 21 February 2015.
- Single, E; Robson, L; Xie, X; Rehm, J (1998). "The economic costs of alcohol, tobacco and illicit drugs in Canada, 1992". Addiction. 93 (7): 991–1006. doi:10.1046/j.1360-0443.1998.9379914.x. PMID 9744130.
- "How does tobacco use affect the economy?". cancer.org. Retrieved 21 February 2015.
- Bloom, D.E.; Cafiero, E. T.; Jané-Llopis, E.; Abrahams-Gessel, S.; Bloom, L. R.; Fathima, S.; Feigl, A. B.; Gaziano, T.; Mowafi, M.; Pandya, A.; Prettner, K.; Rosenber, L.; Seligman, B.; Stein, A. Z.; Weinstein, C. "The Global Economic Burden of Non-communicable Diseases" (PDF). World Economic Forum. Geneva: World Economic Forum. Retrieved 21 February 2015.
- Allen Johnson (21 March 2010). "Should my Diet Dew addiction be punished with a tax?". News & Record, Greensboro, NC. Retrieved 27 May 2010.
- Hartnett, Kevin (3 February 2014). "Boston's black-market cigarette problem". The Boston Globe. Retrieved 29 April 2017.
- Dominiczak, Peter (14 November 2016). "Sin taxes on alcohol and tobacco have cost the Treasury £31bn, analysis finds". The Daily Telegraph. London. Retrieved 29 April 2017.
- Hoffer, Adam; Shughart, William; Thomas, Michael (February 2013). "Sin Taxes: Size, Growth, and Creation of the Sindustry". Mercatus.
- Farrelly, Matthew; Nonnemaker, James; Watson, Kimberly (September 2012). "The Consequences of High Cigarette Excise Taxes for Low-Income Smokers". PLOS ONE. PLOS. 7 (9): e43838. doi:10.1371/journal.pone.0043838. PMC 3440380. PMID 22984447.
- Williams, Richard; Christ, Katelyn (July 2009). "Taxing Sin". Mercatus.
- "Alcopops sales down, but spirits booming". July 2008.
- "Detailed Response to Contradictions". Climate Action Now. Retrieved 30 April 2013.
When we rely on a sin tax for general revenues, we have a perverse incentive to maintain that revenue stream. It hurts government services when Canadians reduce their use of fossil fuels.