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“Sin” Taxes – e.g., on Tobacco – Are Less Efficient than They Look
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“Sin” Taxes – e.g., on Tobacco – Are Less Efficient than They Look

But they do help improve public health

The Economist
The Economist, 2018
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Editorial Rating

7

Qualities

  • Analytical
  • Scientific

Recommendation

Tobacco, alcohol and sugar are bad for people’s health. Excessive consumption creates direct and indirect costs for taxpayers. So policy makers in the United States and Europe consider taxing harmful substances to offset these costs and nudge people toward making healthier choices. This article from The Economist compares various studies on the effects of these taxes and shows that what may sound straightforward in theory is more complicated in practice. Both sin-tax advocates and skeptics will appreciate this balanced, evidence-supported analysis.   

Take-Aways

  • Governments levy “sin taxes” on goods such as alcohol and tobacco to deter harmful habits and to offset the costs that abuse of these substances incur to society. 
  • These levies succeed at curbing consumption.
  • Sin taxes tend to affect poorer people more than the rich.

About the Author

The Economist is a UK-based weekly magazine covering economics and politics. 

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