Increasing Taxes on Alcohol and Cigarettes Essay Example for Free

Increasing Taxes on Alcohol and cig atomic number 18ts EssaySin appraisees on cigarettes and intoxicant are designed to gain revenue, non improve public health Minimum alcohol pricing will exacerbate mendicancy and entrench inequality without discouraging binge intoxication Most of the hails of drinking and smoking fall on individual consumers, not the public. There is no economic justification for increasing taxes on smokers and drinkers.In a report released today, The Wages of Sin Taxes (Download PDF) by Christopher Snowdon, the spell Smith Institute condemns the organizations decision to increase taxes on cigarettes and alcohol this family and to introduce minimum alcohol pricing. The report argues that sin taxes (taxes on commodities seen as harmful to health) are ineffective in reducing consumption and are not necessary for recouping lost revenue. The taxes are highly regressive and force the poor to pay for the governments mishandling of public finances. The tax es dont workCigarette taxes are now so high that increases drive smokers to the black market instead of discouraging consumption or raising more revenue. Sin taxes are more likely to deter moderate users than heavy users, whose demand for cigarettes and alcohol is relatively inelastic. A heavy smoker or an alcoholic is unlikely to surmount consumption because of a price rise, making sin taxes an unreliable way of reducing consumption or improving public health. The victims of cigarette and alcohol certificate of indebtednessSin taxes hit moderate and heavy users alike. Research has shown that previous rises in cigarette tax have made only 2.3% of smokers quit, with the other 97.7% just salaried more in tax. Taxes on cigarettes and alcohol are regressive and hit the poor hardest. The average smoker spends 1660 a year on cigarettes 20% of the butt joint 10%s income. Sin taxes are the most regressive indirect taxes, as they tend to target products that are disproportionately consu med by the poor. Minimum alcohol pricing is also deeply regressive, only affecting the cheaper drinks consumed by the poor. Punishing poor people for enjoying a drink or a cigarette exacerbates poverty and treats the poor like children who need to be controlled by the state. The public cost of smoking and drinkingTaxes on cigarettes and alcohol have often been justified by studies that claim to estimate the social cost of these vices. These studies include intangible costs borne by individual consumers, such as emotional distress, lost eld of life, and individual expenditures on cigarettes and alcohol. These are personal costs, not social costs. They also fail to include the economic benefits the alcohol and cigarette industry gives to the UK in cost of employment and government revenue. Most of these studies should be relegated to the bin of junk statistics.In fact, smokers and heavy drinkers do not cost the state more. Though smokers may cost more during their working lies, but non-smokers require greater expenditure in pensions, nursing care and wel uttermoste payments. Chronic diseases associated with old age are far more expensive than the lethal diseases associated with smoking and alcoholism. Smokers and drinkers are not a rouse on the state, and the myth of saints subsidising sinners should not be used to justify tax rises. The appeal of sin taxesDespite the fact they hurt the poor and do not change consumer consumption, sin taxes have always been popular with governments as a source of revenue. Sin taxes and minimum alcohol pricing should be recognised for what they really are stealth taxes and paternalism designed to control the poor. Chris Snowdon, author of the report and Adam Smith Institute fellow, says Campaigners for sin taxes and minimum pricing often claim that healthy citizens are forced to bear the cost of other peoples lifestyles. In fact, the evidence shows that smokers take less from the communal pot than the average Briton and the money raised from alcohol duty comfortably pays for any burden drinking places on public services. If the aim of policy is to make individuals pay their way, the government should slash the beer tax and subsidise cigarettes. We are not seriously suggesting the government does this, but if politicians insist on increasing taxes on these products, they should admit that the purpose is to raise revenue. Essentially the government is forcing the people who are least likely to live to extreme old age to pay for the escalating costs of an ageing population.