Posted 5:25 p.m. Wednesday, Feb. 13, 2013
Economics professor writes opinion article in U.S. News & World Report on how sin taxes are growing in the wake of a weak economy to encompass items not necessarily sinful such as soda or a deck of playing cards.
[caption id="attachment_20607" align="alignright" width="259" caption="Adam Hoffer, assistant professor of economics"]
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Should the government continue to generate revenue by finding more sinful things to tax? Sin taxes are taxes on items deemed bad for the public — such as cigarettes, alcohol and gambling. However, in recent years the scope of what is considered a sin tax is expanding, says Adam Hoffer, UW-L assistant professor of economics.
Hoffer wrote an opinion article in U.S. News & World Report on how these taxes are growing in the wake of a weak economy to encompass items not necessarily sinful such as candy bars, soda or a deck of playing cards. In the article, Hoffer cites some of the negative consequences of sin taxes such as the millions of dollars spent on lobbying by corporations who don’t want increased taxes on their products. A prime example is the funds now being spent to counter New York City Mayor Michael Bloomberg’s ban on 32-oz soft drink containers, explains Hoffer.
“It’s a drain on otherwise productive resources that could be used by the company to develop something healthier,” he says. “Instead corporations spend the money trying to influence politicians into thinking a 32 oz. soft drink is a good idea.”
Hoffer also points out that sin taxes generate a burden that falls mostly on the poor who typically continue to purchase sin-taxed items even though it accounts for a larger percentage of their take-home pay. And revenues from the taxes, while going into state or federal coffers, aren’t necessarily being directed back toward the programs that will reduce consumption of the item deemed sinful, according to Hoffer’s research. For instance, a gas tax doesn’t necessarily go toward roads and a cigarette tax isn’t necessarily directed toward smoking cessation.
Hoffer wrote the article after extensive research on tax trends, stemming from his doctoral dissertation on tobacco taxation.
“I hope this raises some eyebrows,” says Hoffer. “I hope people see the overall costs of the sin tax outweigh the benefits.”
Read Hoffer’s article.
[/caption]
Should the government continue to generate revenue by finding more sinful things to tax? Sin taxes are taxes on items deemed bad for the public — such as cigarettes, alcohol and gambling. However, in recent years the scope of what is considered a sin tax is expanding, says Adam Hoffer, UW-L assistant professor of economics.
Hoffer wrote an opinion article in U.S. News & World Report on how these taxes are growing in the wake of a weak economy to encompass items not necessarily sinful such as candy bars, soda or a deck of playing cards. In the article, Hoffer cites some of the negative consequences of sin taxes such as the millions of dollars spent on lobbying by corporations who don’t want increased taxes on their products. A prime example is the funds now being spent to counter New York City Mayor Michael Bloomberg’s ban on 32-oz soft drink containers, explains Hoffer.
“It’s a drain on otherwise productive resources that could be used by the company to develop something healthier,” he says. “Instead corporations spend the money trying to influence politicians into thinking a 32 oz. soft drink is a good idea.”
Hoffer also points out that sin taxes generate a burden that falls mostly on the poor who typically continue to purchase sin-taxed items even though it accounts for a larger percentage of their take-home pay. And revenues from the taxes, while going into state or federal coffers, aren’t necessarily being directed back toward the programs that will reduce consumption of the item deemed sinful, according to Hoffer’s research. For instance, a gas tax doesn’t necessarily go toward roads and a cigarette tax isn’t necessarily directed toward smoking cessation.
Hoffer wrote the article after extensive research on tax trends, stemming from his doctoral dissertation on tobacco taxation.
“I hope this raises some eyebrows,” says Hoffer. “I hope people see the overall costs of the sin tax outweigh the benefits.”
Read Hoffer’s article.