President Obama's call for a 94-cent-a-pack hike on federal cigarette taxes to fund early childhood education programs is controversial. The tax is being presented as way to fund education and reduce smoking rates. It would raise roughly $78 billion over 10 years. The proposed tax would be beneficial for all health wise and for the economy. Raising taxes on tobacco problems would reduce the use of the products and overall be beneficial for the health of all of us. With the increase in taxes on tobacco products could come a longer rate on life expectancy and overall health. Could this tax be beneficial or will this hurt our economy with the cut back of buying tobacco products. We will find out soon enough in the months to come.
Monday, April 15, 2013
Obama calls for cigarette tax hike of 94 cents a pack
http://money.cnn.com/2013/04/10/news/economy/cigarette-tax/index.html?iid=SF_E_River
President Obama's call for a 94-cent-a-pack hike on federal cigarette taxes to fund early childhood education programs is controversial. The tax is being presented as way to fund education and reduce smoking rates. It would raise roughly $78 billion over 10 years. The proposed tax would be beneficial for all health wise and for the economy. Raising taxes on tobacco problems would reduce the use of the products and overall be beneficial for the health of all of us. With the increase in taxes on tobacco products could come a longer rate on life expectancy and overall health. Could this tax be beneficial or will this hurt our economy with the cut back of buying tobacco products. We will find out soon enough in the months to come.
President Obama's call for a 94-cent-a-pack hike on federal cigarette taxes to fund early childhood education programs is controversial. The tax is being presented as way to fund education and reduce smoking rates. It would raise roughly $78 billion over 10 years. The proposed tax would be beneficial for all health wise and for the economy. Raising taxes on tobacco problems would reduce the use of the products and overall be beneficial for the health of all of us. With the increase in taxes on tobacco products could come a longer rate on life expectancy and overall health. Could this tax be beneficial or will this hurt our economy with the cut back of buying tobacco products. We will find out soon enough in the months to come.
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Using a tax to get rid of a negative externality is pretty common, so this doesn't surprise me much. However, I am unsure whether the decrease in spending on cigarettes will be counterbalanced by an increase in output from healthier workers. Also, it's risky business to depend on a sin tax to fund things like education, because once people stop using the goods, no tax money will come from their sale, and they'll have to resort to other methods of sales tax.
ReplyDeleteI agree with Brian, it is extremely risky to continue to tax these sort of things and not expect a decrease in demand. Where I am from a pack already costs 13 some dollars, If it is taxed much more people will start resorting to dipping.
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