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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 need
by 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 agoExcept it's not true. Smokers die sooner so they actually reduce the cost of the healthcare system.
- abfan1127 5y agoare their methods of death more or less expensive?
- runeks 5y agoDying soon doesn’t reduce costs if it’s preceded by needing a decade of medical attention.
- dwater 5y agoHighlights • 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 agoYa that isn't true as they don't die fast, and they usually don't all die: https://www.reuters.com/article/us-healthcare-costs-smoking-idUSKBN0JX2BE20141219 https://www.reuters.com/article/us-healthcare-costs-smoking-... Estimate on this says 8.7% of health care spending caused by it.
- colinmhayes 5y agodeadweight loss is the term you are thinking of, and this is the same reason milton friedman called land value tax "the least bad tax."
- cperciva 5y agoSin taxes produce more revenue than energy royalties, but most of the revenue from the oil and gas sector is income taxes on the companies and their employees.
- jlos 5y agoAh that's correct. Thanks for the clarification.
- deleted 5y ago[deleted]