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WASHINGTON, D.C., February 20, 2013 - From alcohol to tobacco to sugary or caffeinated foods and beverages, price increases known as “sin taxes” that target politically incorrect products do little to limit their use and nothing to reduce alleged societal costs. That's the finding of a newly published study, The Wages of Sin Taxes , by scholar Chris Snowdon.
Most remarkably, Snowdon, a fellow at the Adam Smith Institute in London, demonstrates that financial burden supposedly placed on society through the consumption of alcohol, tobacco, high-calorie foods, has little basis in reality. The myth that these “sinners” cost the rest of us money is perpetuated in large part because "government has no incentive to tell the public that these groups are being exploited, and the affected industries dare not advertise the savings that come from lives being cut short by excessive use of their products." This type of tax is actually a regressive “stealth tax” that allows lawmakers to take money from their constituents with the lowest incomes without the pushback an upfront tax would provoke.
Certainly, many of those proposing price increases on so-called unhealthy products genuinely wish to improve the health of their fellow man and view these taxes as a means to that goal. Snowdon demonstrates that, regardless of their intended purpose, such taxes rarely produce the desired outcome many cases cause greater harm to those they are meant to help.
"Where most cost-of-sin studies merely examine the supposed costs drinking, smoking and eating fatty foods impose on society, The Wages of Sin Taxes takes a look at both costs and benefits to public finances," said Michelle Minton , CEI Fellow in Consumer Policy Studies.
"In fact, the vast majority of such costs are invented or are borne by the 'sinner' himself-not the public," said Minton.
From The Wages of Sin Taxes:
> View the report, The Wages of Sin Taxes