What is a Sin Tax?
Sin taxes have been around since the 1600s in America and were originally attempts to modify what those in authority viewed as sinful behaviors. Today they are primarily used to tax alcohol, tobacco, gambling and pornography.
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History
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After the Civil War, one-cent taxes were imposed on cigars, manufactured tobacco, beer, wine and even playing cards. This marked the birth of sin taxes.
Benefactors
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When cities and states face budget crises, they often increase sin taxes on cigarettes and alcohol to help decrease deficits.
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Behavior Modification
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Some argue that sin taxes are an effective tactic to change behaviors, and can aid in getting people to quit smoking, drinking or gambling.
"Twinkie Tax"
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Since the mid 1990s there have been a few attempts to levy a sin tax on junk foods. The proposed tax is nicknamed the "Twinkie Tax" after the popular snack food. The rationale is that junk food leads to obesity and other illnesses and increases healthcare costs. However, as of 2010, Americans are still able to eat their French fries, candy bars and snacks sin tax-free.
Impact
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Consumers pay the sin tax, but there is no sin tax imposed on manufacturers. However, sales can decrease, thereby impacting businesses, which can in turn lead to layoffs and firings of workers.
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References
- Photo Credit la cigarette image by Anthony CALVO from Fotolia.com
