14 ms·

10% of households pay more than 80% of taxes on alcohol and cigarettes

93 points by elsewhen 5y ago

cle 5y ago
Link doesn't work for me, looks like it was meant to be this: https://www.nber.org/papers/w29393 https://www.nber.org/papers/w29393
- vages 5y ago
  Me too! Thanks for posting the URL. Surprised that this complaint isn't voted higher up (currently). One of the things that make HN discussions better than in most places is the unofficial requirement to read more than just the headline. If we don't read stuff before we comment, we'll slowly become just like any other forum on the web. Even if that's the destiny of any web forum, I'd like to fight it for as long as possible.
fbergen 5y ago
While is sounds shocking at first, I'm curious why finding more occurrences of Pareto or 80/20 rule is still making headlines? It's almost like rather any deviation from that would be more surprising
Clubber 5y ago
I feel sin taxes are immoral but easy to implement against a minority of poor people who don't have the means or numbers fight back.
- computerphage 5y ago
  Why do you think they're immoral?
  - fithisux 5y ago
    because cigarettes and alcohol are drugs.
    - deleted 5y ago
      [deleted]
    - Zababa 5y ago
      What is your definition of drugs and why are drugs immoral?
  - peoplefromibiza 5y ago
    not OP but I guess because they hit the poorer segment of the population and it's an income that comes from exploiting an addiction. There is no sin tax for very wealthy people with very bad habits, like traveling with their private jets. On the other hand as a smoker I am 100% in favour of the ban on smokes in public places. Maybe more bans and less sin taxes could be a better option, I'm not sure myself, but I can see why someone could consider them borderline immoral.
  - another-dave 5y ago
    Not the OP, but my argument would be that things should either be legal or illegal. Fine if stuff has a naturally high price, everyone can't have a Tesla or a Ferrari, but if something is deemed to be morally OK (and therefore legal), it's not the government's place to then penalising people for spending their money on it. If taxes from cigarettes and alcohol were ring-fenced purely for treating smokers, prevention campaigns & alcohol anonymous programmes etc then I might be in favour. But for example — supposedly treating smokers costs the NHS £2.5bn per year (https://twitter.com/UKHSA/status/887261639720001536 https://twitter.com/UKHSA/status/887261639720001536), but the duty on cigarettes brings in £9.9bn (https://www.statista.com/statistics/284329/tobacco-duty-united-kingdom-hmrc-tax-receipts/ https://www.statista.com/statistics/284329/tobacco-duty-unit...). For alcohol — the overall budget of the NHS is ~£130bn currently. This article (2016) estimated that alcohol related cases cost the NHS 3.6% of its budget (https://www.theguardian.com/news/datablog/2016/jan/22/alcohol-and-the-nhs-five-key-questions https://www.theguardian.com/news/datablog/2016/jan/22/alcoho...) which, assuming the same now would be £4.7bn today, but alcohol duty brings in £12bn (https://www.statista.com/statistics/284336/united-kingdom-hmrc-tax-receipts-alcohol-duties-by-type/ https://www.statista.com/statistics/284336/united-kingdom-hm...). Even accounting for other costs (e.g. accidents), the government is making a huge return on allowing these products to be sold, so it seems hypocritical to then punish people for using them, especially if people want to enjoy them in moderation.
  - Clubber 5y ago
    Everyone should pay their fair share of taxes and to overburden a group of people because we don't like what they do (smoke, drink, etc) or who they are (poor) not only puts an undue burden on people already suffering for our moral objectives (quit smoking, quit drinking), but allows others (non-smokers, non-drinkers) to pay less taxes than their fellow citizens. Wealthy people certainly can afford to smoke and drink all they want, it's just the poor people who aren't allowed with sin taxes. Just doesn't sit right with me.
- gowld 5y ago
  Poor people are compensated by separate welfare programs.
- Scoundreller 5y ago
  It’s the downstream effects that concern me. Do sin taxes reduce consumption in aggregate? Yes. But for those that it doesn’t, it means they’re spending more of their disposable income on their addiction and not things for the rest of their family.
- Fogest 5y ago
  In places that have free healthcare like Canada the sin taxes actually start to make a lot more sense. Heavy smokers and alcoholics are likely to use more healthcare resources compared to somebody who doesn't engage in those activities. So in my mind it seems "fair" for those things to be taxed higher. However I have seen these sin taxes applied to areas where this is not as true. For example in Canada marijuana is taxed quite heavily. But marijuana isn't something that causes much physical harm or physical dependence like alcohol. So it's odd that it is also so highly taxed. Especially edible versions of it that don't have the associated smoking risk. But I think overall as a whole in societies like this it can make sense. In places like America though maybe sin taxes don't make as much sense. You're paying a lot for your habit but are you getting any extra benefit out of it? If you need extra healthcare that is going to be on your insurance on your pocket. I would compare the sin taxes also to the carbon taxes we have implemented in Canada. You pay an extra tax at the gas station on your fuel. The idea is that those taxes paid are earmarked for climate change initiatives. Now is that tax money actually being spent appropriately? Who knows. But it does make sense in some sense to disincentivize destructive activities and use the taxes to offset the cost of those activities.
  - kyleee 5y ago
    "In places that have free healthcare like Canada the sin taxes actually start to make a lot more sense. Heavy smokers and alcoholics are likely to use more healthcare resources compared to somebody who doesn't engage in those activities. So in my mind it seems "fair" for those things to be taxed higher." I'd recommend doing some digging here, I've seen many claims that such folks actually end up being responsible for lower lifetime healthcare expenditure due to earlier death and I'm sure myriad other factors
    - Fogest 5y ago
      Does them living a shorter life mean they are cheaper? I feel like comparing someone who dies of lung cancer at 60 years old to somebody who lives to 90 isn't really a fair comparison. Sure that 90 year old may end up costing more in terms of healthcare, but if you compared their usage up to 60 they would not have used the same. Someone who lives longer simply has more time alive and thus more time in the country where they may require medical care. But I don't think that means they are the same burden as someone who has a shorter life span but requires a lot of unnecessary care due to the unhealthy choices they made during their life.
irrational 5y ago
>Efforts to increase sin taxes should consider the heavy burdens borne by few households. I think they should consider how much nicer things are now that so many fewer people smoke. I can still remember people smoking on planes, in restaurants, etc. It was terrible. I'm in favor of anything that keeps that from happening again.
- Scoundreller 5y ago
  It wasn’t sin taxes that stopped those things.
  - mhh__ 5y ago
    There is still less smoking regardless, though. Where I live if I see someone smoking in public more often than not they are a student from a country where cigarettes are much much cheaper. A packet of cigarettes is 4.5x cheaper in Poland than the UK for example.
  - scrollaway 5y ago
    It is to a great degree. Many acquaintances have stopped smoking because it got too expensive. That many people stopped smoking is what enabled us to ban it in so many places afterwards. The bans are a huge inconvenience to smokers. That's the point, but it would have been political suicide a few decades prior.
    - deleted 5y ago
      [deleted]
    - another-dave 5y ago
      though if that's correct, in that case, wouldn't the 'sin' tax have been political suicide if that was brought in first when there was even more smokers?
      - scrollaway 5y ago
        You can make a tax far more gradual than a ban. Slow boiling frogs and what not. And that is exactly what happened with cigarettes, at least here in Europe.
aappleby 5y ago
Is that a problem?
- tyingq 5y ago
  I'm guessing the argument is that it puts the burden on disproportionally poor people, whom the tobacco and alcohol lobbies specifically targeted with advertising, etc. Like the way menthol cigarettes were pushed to the black community. Maybe the idea is to have those industries bear some of the sin tax burden? The linked page is a 404 for me, so I'm guessing.
  - kissickas 5y ago
    > Total sin tax burdens are poorly explained by demographics (including income). While two most-taxed clusters may be low-income, the researchers found a poor correlation between income and sin tax burden overall. More detail from the paper: > The second takeaway is that saying “sin taxes are regressive” or “sin taxes are progressive” largely misses the point. There is much more variation among households within income groups than across them in purchases of sin goods (Figure 3). Even among the lowest-income groups, the majority of households pay negligible amounts of sin taxes, and there are heavy smokers and heavy drinkers at all levels of education and income.
elmerfud 5y ago
I'm not in favor of sin taxes, but even if these items were taxed at the standard rate, these percentages wouldn't change. If anything, it shows that there's a great chemical dependency that should be addressed and taxation isn't an effective way to promote societal change.
- xapata 5y ago
  > even if these items were taxed at the standard rate, these percentages wouldn't change Back in school, we read studies that reached the opposite conclusion, suggesting that "sin" taxes are effective.
- tombert 5y ago
  I somewhat agree. I think that all that might happen is that the headline would change to something along the lines of "10% of households pay 50% of taxes on alcohol and cigarettes". I think it's easy to look at these things, see how they disproportionately affect the poor, and try and draw a causative relation based on that. I get it, I'm guilty of it, but I think a lot of these problems are substantially deeper than that. I think the more important question is "why are these 10% so dependent on alcohol and cigarettes? what about the way we structure society leads to this behavior?" and I think focusing on the "sin tax" part of it really misses the mark. Eliminating sin taxes would be, at most, a band-aid patch, not a "solution".
- mumblemumble 5y ago
  My alternative hypothesis would be that you would expect the imbalance to increase if sin taxes work, because they would suppress consumption among casual consumers, but not the addicts, among whom demand is expected to be less elastic. Which is a societal change, though maybe not the intended one.
mensetmanusman 5y ago
It’s interesting that we have found a way to reduce smoking through taxes but not the much larger problem of obesity.
- josephcsible 5y ago
  I assume this is just because you can stop smoking altogether, but can't stop eating altogether.
- math-dev 5y ago
  Sugar and other lobbies
- colinmhayes 5y ago
  Here in Chicago we passed a (poorly implemented) sugary beverage tax. Nonstop political ads followed and it was repealed after less than a year.
- jjice 5y ago
  It would be really interesting to see a sort of sin tax applied to unhealthy foods that contain excess sugar (soda, candy, etc). Not saying I'd be for or against it, but I'd be very interested to see how it'd affect people's habits, if at all. Not sure how you could try something like that on a small scale with a country with these issues like the US since people could just drive a town over, and a state would probably be too big of a sample size.
- xbar 5y ago
  Where is the evidence that smoking has been reduced through taxes?
- kube-system 5y ago
  It's hard, logistically, to tax consumption at the margin. We can do it with income because it's highly documented. We tax smoking with a flat rate because nobody needs any of them. It's not exactly a great idea to tax a hungry kid's only meal of the day. Really, the only way you could logically do this is to track everyone's consumption of food, which is very problematic for various reasons... or by taxing certain types of food, which is more likely to shift the problem rather than solve anything. It's probably easier to impact health by encouraging movement than decreasing food intake.
JohnGB 5y ago
And 0.001% of households are billionaires and often pay no tax at all. Somehow, that doesn't seem fair to me.
hammock 5y ago
The article is down right now, but looking at the comments, the framing of this issue is weird. 10% pay 80% because 10% BUY 80%. That might be hard to believe. But I remember looking at data on liquor consumption and curious about what the 80/20 rule was on it, and I was horrified to find that the something like over 50% (correction, 90%) of all liquor is consumed by people who drink and AVERAGE of 750ml for themselves per week. Alcohol sales primarily go to alcoholics. It's a truth we don't want to see. EDIT: when I say "liquor" I mean vodka, whiskey, etc - stuff that is at least 80 proof/40% ABV. Not wine.
- olalonde 5y ago
  That's like one bottle of wine? I really don't think that's enough to qualify someone as an alcoholic? I drink once or twice per week and probably go through more than that.
  - loeg 5y ago
    Alcoholics drink a lot more than 750mL of wine a week. Wine is only ~12-16% alcohol. I think OP is either referring to ~40% liquor or 100% ethanol (as a unified way to compare across consumption of different types of alcoholic beverages).
    - olalonde 5y ago
      Oh right, brain fart.
  - MivLives 5y ago
    It's one bottle of wine, but I'm assuming they're referring to liquor. There's about 17 drinks (it's like 44 ml to a shot in the US) in a bottle of liquor. That said 17 drinks in a week is 2 a weekday plus 3 a weekend, which doesn't seem that crazy.
    - conception 5y ago
      Until you realize that that means -every week- that's your plan. When's the last time you drank 2+ drinks a day every day for a year?
ootsootsoots 5y ago
This isn’t so shocking as history alone makes it clear society operates on aristocrats legalizing externalizing effort. They own everything and role play as if making investment choices is work but… they own everything so the monopoly outcomes are guaranteed. Figuratively the class warfare was fought and won, and effort to fight for the public was deflected back as selfishness. Class aristocrat: def todolist: While breathing: leverage wealth to buy more useful property to extract wealth selling disposable property Source: me, an aristocrat with a patent who earns a few cents for every gadget sold in the US due to some math I wrote down to receive a masters degree. My work did not give rise to the physical phenomenon, nor does it really have anything to do with designing or selling gadgets. It just states an objective mathematical truth. Thanks to everyone’s political belief for enabling my retiring before 40.
jlos 5y ago
I met one of the individuals responsible for introducing the heavy tax on cigarettes in the province of Alberta. He said it was fairly simple, The province needed more money and from the data they found that cigarette prices were inelastic. I.e. people will continue smoking even if prices went up. From an economics perspective those are the items you want to tax because taxing elastic items leads to what's known as dead weight, a type of economic inefficiency. He also said that the province typically brought in more money from cigarettes, liquor, and gambling them from oil and gas revenues, which was pretty shocking considering what a staple that is for government revenue in that province. The other argument in its favor he brought up was that these people are increasing the overall cost to the Healthcare system, and the sin taxes are a way I'm dealing with that.
- snarfy 5y ago
  Except it's not true. Smokers die sooner so they actually reduce the cost of the healthcare system.
  - abfan1127 5y ago
    are their methods of death more or less expensive?
  - runeks 5y ago
    Dying soon doesn’t reduce costs if it’s preceded by needing a decade of medical attention.
  - dwater 5y ago
    Highlights • Cigarette smoking contributed to 11.7% (more than $225 billion) of annual healthcare spending in the U.S. in 2014. ... Conclusions Cigarette smoking exacts a substantial economic burden in the U.S. Continuing efforts to implement proven population-based interventions have been shown to reduce the health and economic burden of cigarette smoking nationally. Source: https://www.sciencedirect.com/science/article/abs/pii/S0091743521001134 https://www.sciencedirect.com/science/article/abs/pii/S00917...
  - bwb 5y ago
prvc 5y ago
A peculiarly characterized factoid. What proportion of taxes ought to be due to those activities in the article's view?
nostromo 5y ago
Here in Seattle, we have no income tax. We also don't charge any taxes on things like transit, groceries, healthcare, rent, and utilities. It's quite possible to live as a lower-income individual in Seattle without paying almost any state or local taxes. But if you smoke tobacco or marijuana, drink alcohol or sugary drinks, eat fast food or prepared food -- you'll pay a ton in taxes. It's a bit ironic that such a progressive town has found a way to push so many taxes on poor people in an attempt to help them.
- Sebguer 5y ago
  I mean the biggest driver of this is not anything to do with Seattle specifically, but instead the State's constitutional prohibition on an income tax, which forces cities and counties to use more regressive tax methods.
  - loeg 5y ago
    A prohibition on income tax and on progressive (uneven) taxation in general. The legislature are trying to push against both prohibitions in 2022. They have levied a flat 0.85% payroll tax, which is essentially an income tax, and a progressive capital gains tax (with a wide 0% bracket and a 7% bracket above some threshold).
    - Sebguer 5y ago
      Yeah, it'll be interesting to see how those both hold up in the courts. The LTC tax is along these lines as well (while also being fairly regressive because literally everyone with any meaningful income is going to opt out of it).
- xemdetia 5y ago
  I feel like the conclusion you are drawing from pushing to is weak here. Yes, those with chemical dependencies for smoking or drinking that also are poor would fall in this category of taxes but sugary drinks, fast food, and prepared food I would say do not fall in that category. I'm not sure how you are tying the other ones because they are primarily consumption taxes as being pushed exclusively on the poor. Even when I was less fortunate what was killing me were things like gas tax, having tolls be more expensive then electronic payments/ezpass, paying government fees and incurring service charges unless you do some crazy manual effort, or running into services that needed me to have a smartphone with data instead of the flip phone I had at the time. Yes, I ate fast food and bought prepared food but I just did it less than I am doing now and I was choosing options that matched my income so my total tax burden from those verticals were lower anyway.
bojangleslover 5y ago
Power law, same holds for taxes over! Somehow I doubt it's the same 10% though...
eutectic 5y ago
We live in a world in which it is easier to collect 'sin taxes' than to tax the rich. The wealthy have resources to fight any attempt to collect a fair, let alone progressive, share of their earnings. And yet, it might be rational in terms of social utility to increase the cost of acquiring alcohol. We face a challenge if we want to balance fairness and utility. The optimal policy surely includes measures which go beyond making psychotropic substances harder to aquire, but I don't know what the answer is. We could spend money on therapy, but would it really pay for itself?
subsubzero 5y ago
I have a problem with "sin taxes". On one hand I think its good that less people are smoking. Its a horrible habit and having less people smoking reduces healthcare costs for society and will add longevity to the many people. Where I have an issue with "sin taxes" in general is that "sins" start to be widely stated and in general really hurt the working class. Take for example in California where gas is taxed to no end, for myself who works from home in software this doesn't really affect me as I only drive on the weekends, for a blue collar worker it becomes extremely expensive as their job forces them to drive and their lower income makes the gas cost increase outsized. In addition in NY the sugar tax on soda seems really heavy handed, typically sugary drinks are chosen by families as they are cheaper than fresher alternatives, what this does is just raise the price on the lowest price flavored drinks for families that can least afford it. Education about obesity and its effects seem non-existent and it would be a better way to go about this than the idea that poor people are stupid and need bad things for them made more expensive.
- nouveaux 5y ago
  Yes it hits poor people more. At the same time, gas prices have a very strong correlation to the purchase of gas guzzling cars. https://www.scientificamerican.com/article/auto-sales-hit-new-record-as-americans-buy-more-gas-guzzling-cars/ https://www.scientificamerican.com/article/auto-sales-hit-ne...
- GordonS 5y ago
  > typically sugary drinks are chosen by families as they are cheaper than fresher alternatives Sugary drinks are cheaper than water? > Education about obesity and its effects seem non-existent I really don't think that's true. The US (and to a lesser extent many other parts of the world) have had a growing obesity crisis for decades - everyone knows that eating too much food is bad for you, and that eating too much sugar results in obesity and diabetes. People buy these things because they are cheap and addictive - but they absolutely do know they are bad for them. I'm of the opinion that the addictive nature of sugar means governments should be stepping in to take action, and I think dropping ridiculous subsidies for sugar and corn make a lot of sense, as well as a "sugar tax" for finished goods like fizzy drinks and candy. Education obviously must continue to play a part, but that alone simply isn't enough.
donatj 5y ago
Page is giving me 404 Not Found
cletus 5y ago
In Australia at the time I grew up we got a lot of British TV. One I still remember fondly is Yes, Minister (and the follow on Yes, Prime Minister). This to me was the golden age of British TV. Anyway, any talk of smoking taxes always reminds me of [1]. Australia is also a good example of the impact of high prices on smoking rates and the evidence strongly suggests hiking prices is the most effective way of bringing down smoking [2]. Still, profiting from death is an ethical issue. If the disastrous War on Drugs has taught us nothing it's that prohibition doesn't work so it's at worst the lesser of two evils. It is unfortunate that this does contribute to keeping some people poor however. [1]: https://www.youtube.com/watch?v=WJIMffhpZRw https://www.youtube.com/watch?v=WJIMffhpZRw [2]: https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-5-impact-of-price-increases-on-tobacco-consumpt https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13...
- netizen-936824 5y ago
  >"It is unfortunate that this does contribute to keeping some people poor however." Which is why instead of prohibition and instead of taxes we should educate the public
billsmithaustin 5y ago
Broken link. Was there actually a study on that subject or was this just a way to start a conversation about taxes?
MivLives 5y ago
Antidotally, my roommate was a pack a day smoker. Switching from cigarettes to a vape saved them more a month than their last raise of 2 dollars an hour. If you have more then one pack a day smoker in a house, that both also drink, it's easy to see how fast these numbers go up.
swarnie 5y ago
Groundbreaking theory - Set the legal age to smoke at 18 then increase this age by 1 year every year after. Everyone who can smoke now gets to continue their quest to die of a debilitating cancer. Children are protected as it will never be legal for them and eventually my tax bill will start to drop as the 200 IQ galaxy brains die out over 50 or so years. There, i've solved socialised healthcare in the sensible world.
- loeg 5y ago
  Most smokers start before 18. Your plan may work anyway, because the way 16 year-olds start is by bumming smokes off their 18 year-old friends. So people would start at 17, 18, 19 as the legal age rose to 19, 20, 21.
- emerged 5y ago
  Or slowly increment the tax over time. Until it’s impossible for anyone but billionaires to smoke. Maybe leave it at just the right amount so the 0.1% does it as a status thing and start dying out.
lgrialn 5y ago
The people who buy something are the ones who pay the taxes on it?? Gosh.
motohagiography 5y ago
I'd wonder if sin taxes are naturally regressive, since higher pleasures (service, entertainment, exotic goods, travel, etc) come from being relatively wealthy, where so-called sinful pleasures are ones with a very low bar to entry.
hazmazlaz 5y ago
Both tobacco and alcohol create significant negative externalities for society at large and hence should be taxed. The fact that they are vices is almost beside the point.
edgriebel 5y ago
In this country we have a right to do dumb things and make bad decisions. The Nanny State can't fix every problem.
- hellisothers 5y ago
  This is a great encapsulation of “freedom to” at all costs without paying heed to “freedom from”.
EastOfTruth 5y ago
I'm ok with sin tax, but I don't think that they should require a camera for porn to be legal... (ie: porn vs prostitution)

93 points by elsewhen 5y ago

cle 5y ago

Link doesn't work for me, looks like it was meant to be this: https://www.nber.org/papers/w29393 https://www.nber.org/papers/w29393

vages 5y ago
Me too! Thanks for posting the URL. Surprised that this complaint isn't voted higher up (currently). One of the things that make HN discussions better than in most places is the unofficial requirement to read more than just the headline. If we don't read stuff before we comment, we'll slowly become just like any other forum on the web. Even if that's the destiny of any web forum, I'd like to fight it for as long as possible.

fbergen 5y ago

While is sounds shocking at first, I'm curious why finding more occurrences of Pareto or 80/20 rule is still making headlines? It's almost like rather any deviation from that would be more surprising

Clubber 5y ago

I feel sin taxes are immoral but easy to implement against a minority of poor people who don't have the means or numbers fight back.

computerphage 5y ago
Why do you think they're immoral?
- fithisux 5y ago
  because cigarettes and alcohol are drugs.
  - deleted 5y ago
    [deleted]
  - Zababa 5y ago
    What is your definition of drugs and why are drugs immoral?
- peoplefromibiza 5y ago
  not OP but I guess because they hit the poorer segment of the population and it's an income that comes from exploiting an addiction. There is no sin tax for very wealthy people with very bad habits, like traveling with their private jets. On the other hand as a smoker I am 100% in favour of the ban on smokes in public places. Maybe more bans and less sin taxes could be a better option, I'm not sure myself, but I can see why someone could consider them borderline immoral.
- another-dave 5y ago
  Not the OP, but my argument would be that things should either be legal or illegal. Fine if stuff has a naturally high price, everyone can't have a Tesla or a Ferrari, but if something is deemed to be morally OK (and therefore legal), it's not the government's place to then penalising people for spending their money on it. If taxes from cigarettes and alcohol were ring-fenced purely for treating smokers, prevention campaigns & alcohol anonymous programmes etc then I might be in favour. But for example — supposedly treating smokers costs the NHS £2.5bn per year (https://twitter.com/UKHSA/status/887261639720001536 https://twitter.com/UKHSA/status/887261639720001536), but the duty on cigarettes brings in £9.9bn (https://www.statista.com/statistics/284329/tobacco-duty-united-kingdom-hmrc-tax-receipts/ https://www.statista.com/statistics/284329/tobacco-duty-unit...). For alcohol — the overall budget of the NHS is ~£130bn currently. This article (2016) estimated that alcohol related cases cost the NHS 3.6% of its budget (https://www.theguardian.com/news/datablog/2016/jan/22/alcohol-and-the-nhs-five-key-questions https://www.theguardian.com/news/datablog/2016/jan/22/alcoho...) which, assuming the same now would be £4.7bn today, but alcohol duty brings in £12bn (https://www.statista.com/statistics/284336/united-kingdom-hmrc-tax-receipts-alcohol-duties-by-type/ https://www.statista.com/statistics/284336/united-kingdom-hm...). Even accounting for other costs (e.g. accidents), the government is making a huge return on allowing these products to be sold, so it seems hypocritical to then punish people for using them, especially if people want to enjoy them in moderation.
- Clubber 5y ago
  Everyone should pay their fair share of taxes and to overburden a group of people because we don't like what they do (smoke, drink, etc) or who they are (poor) not only puts an undue burden on people already suffering for our moral objectives (quit smoking, quit drinking), but allows others (non-smokers, non-drinkers) to pay less taxes than their fellow citizens. Wealthy people certainly can afford to smoke and drink all they want, it's just the poor people who aren't allowed with sin taxes. Just doesn't sit right with me.
gowld 5y ago
Poor people are compensated by separate welfare programs.
Scoundreller 5y ago
It’s the downstream effects that concern me. Do sin taxes reduce consumption in aggregate? Yes. But for those that it doesn’t, it means they’re spending more of their disposable income on their addiction and not things for the rest of their family.
Fogest 5y ago
In places that have free healthcare like Canada the sin taxes actually start to make a lot more sense. Heavy smokers and alcoholics are likely to use more healthcare resources compared to somebody who doesn't engage in those activities. So in my mind it seems "fair" for those things to be taxed higher. However I have seen these sin taxes applied to areas where this is not as true. For example in Canada marijuana is taxed quite heavily. But marijuana isn't something that causes much physical harm or physical dependence like alcohol. So it's odd that it is also so highly taxed. Especially edible versions of it that don't have the associated smoking risk. But I think overall as a whole in societies like this it can make sense. In places like America though maybe sin taxes don't make as much sense. You're paying a lot for your habit but are you getting any extra benefit out of it? If you need extra healthcare that is going to be on your insurance on your pocket. I would compare the sin taxes also to the carbon taxes we have implemented in Canada. You pay an extra tax at the gas station on your fuel. The idea is that those taxes paid are earmarked for climate change initiatives. Now is that tax money actually being spent appropriately? Who knows. But it does make sense in some sense to disincentivize destructive activities and use the taxes to offset the cost of those activities.
- kyleee 5y ago
  "In places that have free healthcare like Canada the sin taxes actually start to make a lot more sense. Heavy smokers and alcoholics are likely to use more healthcare resources compared to somebody who doesn't engage in those activities. So in my mind it seems "fair" for those things to be taxed higher." I'd recommend doing some digging here, I've seen many claims that such folks actually end up being responsible for lower lifetime healthcare expenditure due to earlier death and I'm sure myriad other factors
  - Fogest 5y ago
    Does them living a shorter life mean they are cheaper? I feel like comparing someone who dies of lung cancer at 60 years old to somebody who lives to 90 isn't really a fair comparison. Sure that 90 year old may end up costing more in terms of healthcare, but if you compared their usage up to 60 they would not have used the same. Someone who lives longer simply has more time alive and thus more time in the country where they may require medical care. But I don't think that means they are the same burden as someone who has a shorter life span but requires a lot of unnecessary care due to the unhealthy choices they made during their life.

irrational 5y ago

>Efforts to increase sin taxes should consider the heavy burdens borne by few households. I think they should consider how much nicer things are now that so many fewer people smoke. I can still remember people smoking on planes, in restaurants, etc. It was terrible. I'm in favor of anything that keeps that from happening again.

Scoundreller 5y ago
It wasn’t sin taxes that stopped those things.
- mhh__ 5y ago
  There is still less smoking regardless, though. Where I live if I see someone smoking in public more often than not they are a student from a country where cigarettes are much much cheaper. A packet of cigarettes is 4.5x cheaper in Poland than the UK for example.
- scrollaway 5y ago
  It is to a great degree. Many acquaintances have stopped smoking because it got too expensive. That many people stopped smoking is what enabled us to ban it in so many places afterwards. The bans are a huge inconvenience to smokers. That's the point, but it would have been political suicide a few decades prior.
  - deleted 5y ago
    [deleted]
  - another-dave 5y ago
    though if that's correct, in that case, wouldn't the 'sin' tax have been political suicide if that was brought in first when there was even more smokers?
    - scrollaway 5y ago
      You can make a tax far more gradual than a ban. Slow boiling frogs and what not. And that is exactly what happened with cigarettes, at least here in Europe.

aappleby 5y ago

Is that a problem?

tyingq 5y ago
I'm guessing the argument is that it puts the burden on disproportionally poor people, whom the tobacco and alcohol lobbies specifically targeted with advertising, etc. Like the way menthol cigarettes were pushed to the black community. Maybe the idea is to have those industries bear some of the sin tax burden? The linked page is a 404 for me, so I'm guessing.
- kissickas 5y ago
  > Total sin tax burdens are poorly explained by demographics (including income). While two most-taxed clusters may be low-income, the researchers found a poor correlation between income and sin tax burden overall. More detail from the paper: > The second takeaway is that saying “sin taxes are regressive” or “sin taxes are progressive” largely misses the point. There is much more variation among households within income groups than across them in purchases of sin goods (Figure 3). Even among the lowest-income groups, the majority of households pay negligible amounts of sin taxes, and there are heavy smokers and heavy drinkers at all levels of education and income.

elmerfud 5y ago

I'm not in favor of sin taxes, but even if these items were taxed at the standard rate, these percentages wouldn't change. If anything, it shows that there's a great chemical dependency that should be addressed and taxation isn't an effective way to promote societal change.

xapata 5y ago
> even if these items were taxed at the standard rate, these percentages wouldn't change Back in school, we read studies that reached the opposite conclusion, suggesting that "sin" taxes are effective.
tombert 5y ago
I somewhat agree. I think that all that might happen is that the headline would change to something along the lines of "10% of households pay 50% of taxes on alcohol and cigarettes". I think it's easy to look at these things, see how they disproportionately affect the poor, and try and draw a causative relation based on that. I get it, I'm guilty of it, but I think a lot of these problems are substantially deeper than that. I think the more important question is "why are these 10% so dependent on alcohol and cigarettes? what about the way we structure society leads to this behavior?" and I think focusing on the "sin tax" part of it really misses the mark. Eliminating sin taxes would be, at most, a band-aid patch, not a "solution".
mumblemumble 5y ago
My alternative hypothesis would be that you would expect the imbalance to increase if sin taxes work, because they would suppress consumption among casual consumers, but not the addicts, among whom demand is expected to be less elastic. Which is a societal change, though maybe not the intended one.

mensetmanusman 5y ago

It’s interesting that we have found a way to reduce smoking through taxes but not the much larger problem of obesity.

josephcsible 5y ago
I assume this is just because you can stop smoking altogether, but can't stop eating altogether.
math-dev 5y ago
Sugar and other lobbies
colinmhayes 5y ago
Here in Chicago we passed a (poorly implemented) sugary beverage tax. Nonstop political ads followed and it was repealed after less than a year.
jjice 5y ago
It would be really interesting to see a sort of sin tax applied to unhealthy foods that contain excess sugar (soda, candy, etc). Not saying I'd be for or against it, but I'd be very interested to see how it'd affect people's habits, if at all. Not sure how you could try something like that on a small scale with a country with these issues like the US since people could just drive a town over, and a state would probably be too big of a sample size.
xbar 5y ago
Where is the evidence that smoking has been reduced through taxes?
kube-system 5y ago
It's hard, logistically, to tax consumption at the margin. We can do it with income because it's highly documented. We tax smoking with a flat rate because nobody needs any of them. It's not exactly a great idea to tax a hungry kid's only meal of the day. Really, the only way you could logically do this is to track everyone's consumption of food, which is very problematic for various reasons... or by taxing certain types of food, which is more likely to shift the problem rather than solve anything. It's probably easier to impact health by encouraging movement than decreasing food intake.

JohnGB 5y ago

And 0.001% of households are billionaires and often pay no tax at all. Somehow, that doesn't seem fair to me.

hammock 5y ago

The article is down right now, but looking at the comments, the framing of this issue is weird. 10% pay 80% because 10% BUY 80%. That might be hard to believe. But I remember looking at data on liquor consumption and curious about what the 80/20 rule was on it, and I was horrified to find that the something like over 50% (correction, 90%) of all liquor is consumed by people who drink and AVERAGE of 750ml for themselves per week. Alcohol sales primarily go to alcoholics. It's a truth we don't want to see. EDIT: when I say "liquor" I mean vodka, whiskey, etc - stuff that is at least 80 proof/40% ABV. Not wine.

olalonde 5y ago
That's like one bottle of wine? I really don't think that's enough to qualify someone as an alcoholic? I drink once or twice per week and probably go through more than that.
- loeg 5y ago
  Alcoholics drink a lot more than 750mL of wine a week. Wine is only ~12-16% alcohol. I think OP is either referring to ~40% liquor or 100% ethanol (as a unified way to compare across consumption of different types of alcoholic beverages).
  - olalonde 5y ago
    Oh right, brain fart.
- MivLives 5y ago
  It's one bottle of wine, but I'm assuming they're referring to liquor. There's about 17 drinks (it's like 44 ml to a shot in the US) in a bottle of liquor. That said 17 drinks in a week is 2 a weekday plus 3 a weekend, which doesn't seem that crazy.
  - conception 5y ago
    Until you realize that that means -every week- that's your plan. When's the last time you drank 2+ drinks a day every day for a year?

ootsootsoots 5y ago

This isn’t so shocking as history alone makes it clear society operates on aristocrats legalizing externalizing effort. They own everything and role play as if making investment choices is work but… they own everything so the monopoly outcomes are guaranteed. Figuratively the class warfare was fought and won, and effort to fight for the public was deflected back as selfishness. Class aristocrat: def todolist: While breathing: leverage wealth to buy more useful property to extract wealth selling disposable property Source: me, an aristocrat with a patent who earns a few cents for every gadget sold in the US due to some math I wrote down to receive a masters degree. My work did not give rise to the physical phenomenon, nor does it really have anything to do with designing or selling gadgets. It just states an objective mathematical truth. Thanks to everyone’s political belief for enabling my retiring before 40.

jlos 5y ago

I met one of the individuals responsible for introducing the heavy tax on cigarettes in the province of Alberta. He said it was fairly simple, The province needed more money and from the data they found that cigarette prices were inelastic. I.e. people will continue smoking even if prices went up. From an economics perspective those are the items you want to tax because taxing elastic items leads to what's known as dead weight, a type of economic inefficiency. He also said that the province typically brought in more money from cigarettes, liquor, and gambling them from oil and gas revenues, which was pretty shocking considering what a staple that is for government revenue in that province. The other argument in its favor he brought up was that these people are increasing the overall cost to the Healthcare system, and the sin taxes are a way I'm dealing with that.

snarfy 5y ago
Except it's not true. Smokers die sooner so they actually reduce the cost of the healthcare system.
- abfan1127 5y ago
  are their methods of death more or less expensive?
- runeks 5y ago
  Dying soon doesn’t reduce costs if it’s preceded by needing a decade of medical attention.
- dwater 5y ago
  Highlights • Cigarette smoking contributed to 11.7% (more than $225 billion) of annual healthcare spending in the U.S. in 2014. ... Conclusions Cigarette smoking exacts a substantial economic burden in the U.S. Continuing efforts to implement proven population-based interventions have been shown to reduce the health and economic burden of cigarette smoking nationally. Source: https://www.sciencedirect.com/science/article/abs/pii/S0091743521001134 https://www.sciencedirect.com/science/article/abs/pii/S00917...
- bwb 5y ago

prvc 5y ago

A peculiarly characterized factoid. What proportion of taxes ought to be due to those activities in the article's view?

nostromo 5y ago

Here in Seattle, we have no income tax. We also don't charge any taxes on things like transit, groceries, healthcare, rent, and utilities. It's quite possible to live as a lower-income individual in Seattle without paying almost any state or local taxes. But if you smoke tobacco or marijuana, drink alcohol or sugary drinks, eat fast food or prepared food -- you'll pay a ton in taxes. It's a bit ironic that such a progressive town has found a way to push so many taxes on poor people in an attempt to help them.

Sebguer 5y ago
I mean the biggest driver of this is not anything to do with Seattle specifically, but instead the State's constitutional prohibition on an income tax, which forces cities and counties to use more regressive tax methods.
- loeg 5y ago
  A prohibition on income tax and on progressive (uneven) taxation in general. The legislature are trying to push against both prohibitions in 2022. They have levied a flat 0.85% payroll tax, which is essentially an income tax, and a progressive capital gains tax (with a wide 0% bracket and a 7% bracket above some threshold).
  - Sebguer 5y ago
    Yeah, it'll be interesting to see how those both hold up in the courts. The LTC tax is along these lines as well (while also being fairly regressive because literally everyone with any meaningful income is going to opt out of it).
xemdetia 5y ago
I feel like the conclusion you are drawing from pushing to is weak here. Yes, those with chemical dependencies for smoking or drinking that also are poor would fall in this category of taxes but sugary drinks, fast food, and prepared food I would say do not fall in that category. I'm not sure how you are tying the other ones because they are primarily consumption taxes as being pushed exclusively on the poor. Even when I was less fortunate what was killing me were things like gas tax, having tolls be more expensive then electronic payments/ezpass, paying government fees and incurring service charges unless you do some crazy manual effort, or running into services that needed me to have a smartphone with data instead of the flip phone I had at the time. Yes, I ate fast food and bought prepared food but I just did it less than I am doing now and I was choosing options that matched my income so my total tax burden from those verticals were lower anyway.

bojangleslover 5y ago

Power law, same holds for taxes over! Somehow I doubt it's the same 10% though...

eutectic 5y ago

We live in a world in which it is easier to collect 'sin taxes' than to tax the rich. The wealthy have resources to fight any attempt to collect a fair, let alone progressive, share of their earnings. And yet, it might be rational in terms of social utility to increase the cost of acquiring alcohol. We face a challenge if we want to balance fairness and utility. The optimal policy surely includes measures which go beyond making psychotropic substances harder to aquire, but I don't know what the answer is. We could spend money on therapy, but would it really pay for itself?

subsubzero 5y ago

I have a problem with "sin taxes". On one hand I think its good that less people are smoking. Its a horrible habit and having less people smoking reduces healthcare costs for society and will add longevity to the many people. Where I have an issue with "sin taxes" in general is that "sins" start to be widely stated and in general really hurt the working class. Take for example in California where gas is taxed to no end, for myself who works from home in software this doesn't really affect me as I only drive on the weekends, for a blue collar worker it becomes extremely expensive as their job forces them to drive and their lower income makes the gas cost increase outsized. In addition in NY the sugar tax on soda seems really heavy handed, typically sugary drinks are chosen by families as they are cheaper than fresher alternatives, what this does is just raise the price on the lowest price flavored drinks for families that can least afford it. Education about obesity and its effects seem non-existent and it would be a better way to go about this than the idea that poor people are stupid and need bad things for them made more expensive.

nouveaux 5y ago
Yes it hits poor people more. At the same time, gas prices have a very strong correlation to the purchase of gas guzzling cars. https://www.scientificamerican.com/article/auto-sales-hit-new-record-as-americans-buy-more-gas-guzzling-cars/ https://www.scientificamerican.com/article/auto-sales-hit-ne...
GordonS 5y ago
> typically sugary drinks are chosen by families as they are cheaper than fresher alternatives Sugary drinks are cheaper than water? > Education about obesity and its effects seem non-existent I really don't think that's true. The US (and to a lesser extent many other parts of the world) have had a growing obesity crisis for decades - everyone knows that eating too much food is bad for you, and that eating too much sugar results in obesity and diabetes. People buy these things because they are cheap and addictive - but they absolutely do know they are bad for them. I'm of the opinion that the addictive nature of sugar means governments should be stepping in to take action, and I think dropping ridiculous subsidies for sugar and corn make a lot of sense, as well as a "sugar tax" for finished goods like fizzy drinks and candy. Education obviously must continue to play a part, but that alone simply isn't enough.

donatj 5y ago

Page is giving me 404 Not Found

cletus 5y ago

In Australia at the time I grew up we got a lot of British TV. One I still remember fondly is Yes, Minister (and the follow on Yes, Prime Minister). This to me was the golden age of British TV. Anyway, any talk of smoking taxes always reminds me of [1]. Australia is also a good example of the impact of high prices on smoking rates and the evidence strongly suggests hiking prices is the most effective way of bringing down smoking [2]. Still, profiting from death is an ethical issue. If the disastrous War on Drugs has taught us nothing it's that prohibition doesn't work so it's at worst the lesser of two evils. It is unfortunate that this does contribute to keeping some people poor however. [1]: https://www.youtube.com/watch?v=WJIMffhpZRw https://www.youtube.com/watch?v=WJIMffhpZRw [2]: https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-5-impact-of-price-increases-on-tobacco-consumpt https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13...

netizen-936824 5y ago
>"It is unfortunate that this does contribute to keeping some people poor however." Which is why instead of prohibition and instead of taxes we should educate the public

billsmithaustin 5y ago

Broken link. Was there actually a study on that subject or was this just a way to start a conversation about taxes?

MivLives 5y ago

Antidotally, my roommate was a pack a day smoker. Switching from cigarettes to a vape saved them more a month than their last raise of 2 dollars an hour. If you have more then one pack a day smoker in a house, that both also drink, it's easy to see how fast these numbers go up.

swarnie 5y ago

Groundbreaking theory - Set the legal age to smoke at 18 then increase this age by 1 year every year after. Everyone who can smoke now gets to continue their quest to die of a debilitating cancer. Children are protected as it will never be legal for them and eventually my tax bill will start to drop as the 200 IQ galaxy brains die out over 50 or so years. There, i've solved socialised healthcare in the sensible world.

loeg 5y ago
Most smokers start before 18. Your plan may work anyway, because the way 16 year-olds start is by bumming smokes off their 18 year-old friends. So people would start at 17, 18, 19 as the legal age rose to 19, 20, 21.
emerged 5y ago
Or slowly increment the tax over time. Until it’s impossible for anyone but billionaires to smoke. Maybe leave it at just the right amount so the 0.1% does it as a status thing and start dying out.

lgrialn 5y ago

The people who buy something are the ones who pay the taxes on it?? Gosh.

motohagiography 5y ago

I'd wonder if sin taxes are naturally regressive, since higher pleasures (service, entertainment, exotic goods, travel, etc) come from being relatively wealthy, where so-called sinful pleasures are ones with a very low bar to entry.

hazmazlaz 5y ago

Both tobacco and alcohol create significant negative externalities for society at large and hence should be taxed. The fact that they are vices is almost beside the point.

edgriebel 5y ago

In this country we have a right to do dumb things and make bad decisions. The Nanny State can't fix every problem.

hellisothers 5y ago
This is a great encapsulation of “freedom to” at all costs without paying heed to “freedom from”.

EastOfTruth 5y ago

I'm ok with sin tax, but I don't think that they should require a camera for porn to be legal... (ie: porn vs prostitution)