A sin tax (also known as a sumptuary tax, or vice tax) is an excise tax specifically levied on certain goods deemed harmful to society and individuals, such as Alcohol tax, tobacco tax, drugs, candy, , , coffee, sugar, gambling, vaping, cannabis (wherever legal for recreational use) and pornography.
Summary
The enactment of sin taxes on harmful activities varies by jurisdiction. 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
soda tax has also been suggested.
Some jurisdictions have also levied taxes on recreational drugs such as cannabis where it has been legalized and regulated.
Revenue generated by sin taxes supports many projects imperative in accomplishing social and economic goals.
Support
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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 Michael Joyner and David Warner support increasing taxes on tobacco and alcohol, with the goal of using tax codes to help change behavior and improve health.
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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.
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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.
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The moral, medical and financial arguments are occasionally considered in contemporary news settings.
Opposition
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Sin taxes result in the illegal manufacture, smuggling and/or outright theft of the taxed products, sometimes for personal use but often for sale on the black market.
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Critics of sin tax argue that it is a regressive tax in nature and discriminates against the lower classes. Sin taxes are often assessed at a flat rate meaning they account for a much larger portion of the price of an x by the wealthy. Also, sin tax rates products such as alcohol or cigarettes typically do not account for ability to pay, therefore poor people pay a much greater share of their income as tax.
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Critics also argue sin taxes fail to affect consumers' behaviors in the way that tax proponents suggest, for instance increasing smokers' propensity to smoke cheaper, high-tar, high-nicotine cigarettes when the per-pack tax is raised
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The government may become reliant on the revenue from the tax and have to encourage "sinful" behavior in order to maintain the revenue stream.
See also
