Sin Tax

Profiting off the undesirable

Kevin Niederman

The United Kingdom is done with cigarettes. Through recently enacted laws and a planned tax, experts believe they can have the entire world tobacco-free by the year 2040. The tax, a proposed 50 cents USD, is being supported by all three major political parties in Britain. The estimated $1 billion USD of funding the tax will provide is set to help pay for resources to help smokers quit and prevent non-smokers from starting.

This is on top of the taxes already imposed on tobacco products. These were paraded as sin taxes, or taxes designed to both raise funds and prevent undesirable behavior. After all, it is difficult to support a habit that starts to take a financial strain. However, the steady decline on the sales of cigarettes from its peak in the 1940’s hasn’t affected the tax revenue in England at all. In fact, the revenue almost doubled from 1992 to 2011 and grows higher still. Tobacco taxes alone brought in more than $20 billion USD in England. That number is only set to rise, and America’s is too.

American tobacco taxes are also steadily on the rise. The federal tax per pack of cigarettes has risen from $0.39 to $1.01 since 2008. Tobacco is also taxed at the state and local levels here in the States. Both state and local governments have also incrementally increased their taxation on tobacco, and those taxes are providing quite a bit of revenue. Many states use the income from tobacco taxes to repair failing infrastructure and fund education. In 2013, a bill proposed raising the federal tax to $1.98 per pack. It was turned down for fear that a hike that high would lead to a huge drop in tobacco sales, which would in turn take a chunk of state budgets across the country. Wasn’t the point of higher taxes to act as a disincentive for smoking?

Imagine a swear jar. The idea is that when you swear you pay a previously decided amount of money into the jar. It is supposed to teach you, or condition you, to stop swearing. Now imagine that the funds in the swear jar are used to pay the grocery bill. Although the initial idea was to quit swearing, somebody needs to keep cussing away or else you will be living off of bread and water for the foreseeable future. A sin tax operates on the same principle. Be it tobacco, alcohol, gambling, or saturated fats, the point is to make people quit by raising taxes while still profiting off those who refuse, or simply cannot, quit.

When England said they wanted the world to be tobacco free by 2040, they defined a “tobacco-free” world by one in which less than 1% of people smoked. Do they also plan to keep raking in those $20 billion off of that 1%? Smoking rates are down, it’s true; less than 20% across both the UK and the US. But as screenwriter Sir Ronald Harwood says, “Tobacco is not an illegal substance, yet the government is persecuting a minority.” This minority of smokers grows smaller and smaller still with every day as the taxes go higher and higher. Smokers in New York City have the honor of paying over $14 per pack of cigarettes, over 50% of which is pure tax. The city streets are being paved through the frivolity of addiction.

Sin taxes have also been proposed on things like fats and sugar. With the smoking rate in this country as high as it's been decades past, it is proof that jacking the prices do force many people to quit. In the future, when people have the freedom to buy a block of cheese for $100, how much will obesity rates have fallen? More importantly, how much of our lifestyles will be funded by people who can’t help themselves? Big tobacco takes a lot of flak for profiting off of addiction, rightfully so, but people seldom contemplate how much the government, and, indirectly, its citizens, reaps its share of the profits as well.

Kevin is a sophomore pursuing general studies.