Agreed. I also like to think that these aren't necessarily "sin" taxes, but taxes paid up-front for the increased costs to society for the medical/public safety implications that occur from them.
Smoking actually decreases an individual's use of public resources - because they die so much earlier, smokers use less medical resources than non-smokers over their lifetimes, and they heavily cross-subsidize Social Security payments to non-smokers. From a purely fiscal perspective we should be subsidizing cigarettes, probably to the point of giving them away for free. (Hopefully it goes without saying that there are some really good non-fiscal reasons not to do that.)
The data on drinking is much fuzzier (because so many people drink in moderation) but my impression is that, as you suggest, it's significantly under-taxed relative to its negative externalities.
Edited to add: For comparison, IIRC a Pigouvian tax on sugary drinks should be something like $3 per 12 oz can. People who drink lots of sugary beverages also tend to die sooner, but they use a ton of medical resources while they're around - the average lifetime treatment cost of Type 2 diabetes is over $100k, and that's just one condition.
> because they die so much earlier, smokers use less medical resources than non-smokers over their lifetimes
Although technically true, if you apply a reasonable discount rate the analysis flips back in favor of smoking cessation [1].
If you ignore the fact that old people aren't just sent out the pasture to die, then sure, maybe you can set gamma to an unreasonable small value, you can decide that more early death is cost-effective.
But such an analysis, which again nets out positive for smoking cessation when applying an appropriate discount factor, ignores the fact that healthy older folks still contribute to society.
The retired population is an enormous social asset. They contribute disproportionately to community volunteer work, play an important role in family formation/childcare, and many also work well past retirement age. The average retired person is still performing an significant amount of socially valuable labor, regardless of whether they're filing a W-2. In many communities/families, Social Security and Medicare are at least in part a significant state-subsidized childcare allowance.
They die younger but then on the other end of the scale that's one fewer member of society who may have been working. Now their job needs to be filled.
> We also find that heavy purchasers of one sin good (those in the top decile) are likely to purchase larger amounts of other goods subject to corrective taxation. This phenomenon is particularly strong among households with smokers, who tend to also consume larger amounts of [sugar-sweetened beverages] as well as beer and spirits
There is a fundamental fairness question in play here.
I'm okay with the "individual responsibility but don't except affordable healthcare coverage even from medicare/medicaid" approach. I'm also okay with the "coercive policy to force people to change themselves" approach. And I'm okay with a combination of cost/coercion sharing.
What I'm not okay with is all of society bearing the cost of the 10% of the population that smokes heavily, drinks heavily, and consumers larger amounts of sugary beverages.
I guess you're also not OK with all of society bearing the cost of the 10% or whatever that doesn't work hard enough to get a job and stay off social welfare?
Disadvantaged people aren't some romantic struggling hard workers, they have all sorts of vices and emotional/mental health problems leading them voluntarily to those behaviors. Smokers aren't just selfish pleasure-seeking lazys.
i think this logic makes no sense and is backwards
obesity has the largest impact on healthcare cost by a large margin. might as well tax the obese now because we will pay them back later by keeping them alive
how about: we don’t need to tax lifestyle choices on anyone. because if you’re serious about increased costs to society you very quickly get to a social credit system. where you can show you don’t drink or smoke, aren’t fat, don’t take part in dangerous activities…
There is some evidence that smoking actually reduces total healthcare expenditure, as smokers die more quickly than non-smokers (who tend to linger in hospitals and cost a lot of money at the end of their lives). If true, does this mean smoking should be subsidized?
I'm not entirely convinced alcohol or cigarette abuse cost the public much money.
Healthy or unhealthy, everyone dies. Liver cirrhosis or lung cancer is expensive. But getting Alzheimer's in your 70's and living another 10 years is extraordinarily expensive.
tfehring|4 years ago
The data on drinking is much fuzzier (because so many people drink in moderation) but my impression is that, as you suggest, it's significantly under-taxed relative to its negative externalities.
Edited to add: For comparison, IIRC a Pigouvian tax on sugary drinks should be something like $3 per 12 oz can. People who drink lots of sugary beverages also tend to die sooner, but they use a ton of medical resources while they're around - the average lifetime treatment cost of Type 2 diabetes is over $100k, and that's just one condition.
throwawaygh|4 years ago
Although technically true, if you apply a reasonable discount rate the analysis flips back in favor of smoking cessation [1].
If you ignore the fact that old people aren't just sent out the pasture to die, then sure, maybe you can set gamma to an unreasonable small value, you can decide that more early death is cost-effective.
But such an analysis, which again nets out positive for smoking cessation when applying an appropriate discount factor, ignores the fact that healthy older folks still contribute to society.
The retired population is an enormous social asset. They contribute disproportionately to community volunteer work, play an important role in family formation/childcare, and many also work well past retirement age. The average retired person is still performing an significant amount of socially valuable labor, regardless of whether they're filing a W-2. In many communities/families, Social Security and Medicare are at least in part a significant state-subsidized childcare allowance.
[1] https://www.nejm.org/doi/full/10.1056/nejm199710093371506
JamesBarney|4 years ago
I always thought a solution would be to tax beers 1 dollar, and then give it back to the patron in untransferrable rideshare credits.
2OEH8eoCRo0|4 years ago
throwawaygh|4 years ago
> We also find that heavy purchasers of one sin good (those in the top decile) are likely to purchase larger amounts of other goods subject to corrective taxation. This phenomenon is particularly strong among households with smokers, who tend to also consume larger amounts of [sugar-sweetened beverages] as well as beer and spirits
There is a fundamental fairness question in play here.
I'm okay with the "individual responsibility but don't except affordable healthcare coverage even from medicare/medicaid" approach. I'm also okay with the "coercive policy to force people to change themselves" approach. And I'm okay with a combination of cost/coercion sharing.
What I'm not okay with is all of society bearing the cost of the 10% of the population that smokes heavily, drinks heavily, and consumers larger amounts of sugary beverages.
exporectomy|4 years ago
Disadvantaged people aren't some romantic struggling hard workers, they have all sorts of vices and emotional/mental health problems leading them voluntarily to those behaviors. Smokers aren't just selfish pleasure-seeking lazys.
foolfoolz|4 years ago
obesity has the largest impact on healthcare cost by a large margin. might as well tax the obese now because we will pay them back later by keeping them alive
how about: we don’t need to tax lifestyle choices on anyone. because if you’re serious about increased costs to society you very quickly get to a social credit system. where you can show you don’t drink or smoke, aren’t fat, don’t take part in dangerous activities…
nickff|4 years ago
penneyd|4 years ago
JamesBarney|4 years ago
Healthy or unhealthy, everyone dies. Liver cirrhosis or lung cancer is expensive. But getting Alzheimer's in your 70's and living another 10 years is extraordinarily expensive.
arcticbull|4 years ago