There is no such thing as an action without consequence. Because it does not tax the act itself, the binary sin tax would make little difference in the amount of sin in which any individual who can pay the tax partakes. Canada's experience with cigarette taxes provides a poignant case. A classic statement regarding non-violent forms of social behavior which are nonetheless frowned upon was made by John Stuart Mill in his famous tract On Liberty 1859, 22 : That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. Revenue generated by sin taxes supports many projects imperative in accomplishing social and economic goals. Lesson Summary Sin taxes are usually state-imposed taxes that are added to products or services that are viewed as unhealthy, not necessary for basic needs, or morally questionable. Archived from on 21 February 2015.
These commodities are not essential for life but are widely consumed. When the retail costs of a good become higher than the costs of production plus the usual rate of profit, underground entrepreneurs are driven to provide the good or service in illicit markets. It hurts government services when Canadians reduce their use of fossil fuels. He is also a full-time parish priest, a member of the Mount Pelerin Society, and an international lecturer on economics and religion. . It is limited in the claims it makes and in the power it seeks to exercise.
Whatever economic or social benefits one can dream up from the sin tax, we must also realize that the decision to tax must be weighed against the social benefits for reducing the behavior by slow and deliberate persuasion and voluntary action. But they smoke 40 percent of all cigarettes. It taxes money passed from one generation to another at a high rate. In the part which merely concerns himself, his independence is, of right, absolute. Rather, these spheres have their own peculiar sovereignty which must be respected by the state.
It is contradictory at its very heart. This raises another peculiar aspect of the sin tax. This shows that the state has an inherent interest in having people continue the supposedly sinful behavior. The modern state, however, profits from the sins it chooses to tax. Even sins with no identifiable earthly victims are sometimes objectionable when judged by the eternal law. The quantity demanded only dropped by.
It beat the gambling capital of the world, Las Vegas. Does paying extra taxes on alcohol or tobacco seem right to you? Before we empower the government with what are, effectively, pastoral responsibilities, we ought to consider fundamental issues regarding the interplay between private morality and public policy. This plan may or may not fit with the citizens' own views of what constitutes sin. As much as 80 percent of Canada's export market ends up back in Canada. Sin taxes are more politically viable than raising income or sales taxes.
Complicating matters, the Indian reservations in Canada are exempt from the law. If demand is low, a high tax will have less startling effects in terms of creating underground markets. The effect of the sin tax cannot be measured or predicted by its percentage of the overall retail price of the good or service. A complicated factor is that to higher sin taxes. As Richard John Neuhaus 1984, 118-19 has written:.
This state income allows Nevada to waive income taxes on its residents. Our present era, though hardly akin to Puritan times in its faith in God, is no less anxious to pass laws to enforce minute aspects of behavior. Moreover, sin taxes are typically , meaning the less money a person makes, the more significant is the percentage of their income these taxes consume. Apparently most of the cigarettes being brought into Canada in underground markets were actually manufactured in Canada, exported to the United States, and brought back into the country by disreputable elements. In other words, they foist an unfair burden on the rest of society. Tobacco would come across the borders at cheap prices one way or the other. New York: Classics of Liberty Library, 1992.
The worst elements of society -- those willing to take enormous risks with the law -- made handsome profits, while the peaceful users of these supposedly sinful products paid high prices for their goods. The moral reasoning behind such a tax is clearly evident. The state can tell every person who smokes, drinks, or engages in other vices that he or she must pay a fixed price for that action to the public purse. Taxes decrease their ability to invest in stocks, add to retirement savings, or purchase luxury items. The enforcer of right, and sanctioner of goodness, should not at the same time be profiting from occurrence of sin. Economics of the Sin Tax The use of sin taxes and controls on vice generally date back to before the Founding.
This moral hazard is especially dangerous for the poor, who spend a disproportionate amount of their income on products deemed sinful under a consumption tax. That means an enormous amount of fast profits high enough to lead people to take exorbitant risks. The sin tax -- promoted primarily as a fiscal last resort -- does not qualify as a legitimate intervention under the principle of subsidiarity. Therein lies the danger of entrusting the state to guide behavior whose consequences are necessarily restricted and minimal. As a result, people will have lower chances of dying from lung disease, liver disease, and other health complications brought on from these products. Supporters believe the tax would encourage people to substitute healthier drinks for soft drinks and sugary fruit drinks.