Wednesday, March 07, 2007

The Sin Tax

Minnesota, like many other states in the nation, has had a sin tax on tobacco products for some time now. This article admits that Minnesota knows the tax on cigarettes is a sin tax. The state has been using the extra tax revenue to do wonderful things like fund education and health care. And the tax has been working exactly as expected, as fewer people are smoking every year. However, one man, David Tomassoni, is unhappy with the results. With fewer and fewer smokers, the tax revenue from cigarette sales is rapidly declining. Tomassoni is against a state-wide smoking ban, like the one Ohio installed in January, because he doesn’t want to lose any more tax revenue. There is an obvious trade-off at work here. If people continue to smoke, extra tax revenue can be produced from their purchases and education and health care can continue to improve… there’s only one problem: people are still smoking. The officials of the state now have to decide which is more important to them, creating a more smoke-free state with healthier inhabitants, or making money off of their bad habits to increase funding. The sin tax placed on cigarettes produced the result that was expected, but Minnesota had gotten very attached to the extra revenue—now they have to make a choice with tradeoffs.

9 comments:

LAURA J. STENNAGER said...

It seems a bit contradicting that the tax revenue from cigarettes is being spent on funding health care. Wouldn't you think that less people would need healthcare, if there were less smokers?
I think it seems a bit inhumane to be debating whether it is better to make money, or save lives. Being against the smoking ban because you are lossing money is not a legitimate reason.

msowko said...

I think Minnesota is doing a great thing using a sin tax to create extra revenue for education and health care. Since more peole are starting to quite smoking because of the sin tax, I think Minnesota needs to find another good to tax to keep the extra revenue for the education and health care.

Melissa said...

I think that the sin tax is a great way for Minnesota to not only make money, but also to improve health of those who decide to quit smoking. Plus, they had to realize that putting on this tax that eventually the revenue from it would decrease over time because people are quiting. Loosing money is not a good reason to keep people on a bad habit. Many states have plans to go smoke-free if they are not already, but not only in bars and such, but also in hospitals. Marietta Memorial is talking about a smoke-free campus. I think that Minnesota could come up with another way to raise the revenue instead of keeping profits from those who smoke.

Chengkai Zhao said...

I hope this policy can help people live without tabacco. But how the tobacco affect human life? I don't think it a good thing.

Kacey Righter said...
This comment has been removed by a blog administrator.
Kacey Righter said...

Sin taxes are helpful when it comes to raising revenues and cutting down on the consumption of harmful goods. However, the governement faces a trade-off, which is more important, health or money? In my opinion, I think it would be wiser to continue on cutting back on harmful goods. The government has plenty of other goods that they could tax.

Glenn said...

I agree that complaining that revenue from a sin taxed good is decreasing is ironic. The idea behind sin taxes is to discourage the purchase of the goods, usually because there is some risk of harm either directly or indirectly attached to the consumption of that good. I don't agree with using sin taxes only as a source of revenue. Sin taxes are meant to decrease revenue generated by them over time and should be expected. It bothers me that someone would complain that a sin tax isn't generating revenue like it used to. That is the point of a sin tax.

Trisha Dennis said...

Could they possibly raise the sin tax to make it more of an expense to buy tobacco and still help out the state?

Rob Phillips said...

I love the smoking ban in ohio. Raise the sin taxes its a great idea too. People that dont want to quit wont have much choice but to comply with it, and we all come back from the bars not smelling like a chain smoker