Solution: Should Sin Taxes Be Taxed?

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Final essay Should sin Taxes be raised? The challenge for both economists and public leaders is to calculate and establish a tax level that maximizes social welfare and most efficiently raises revenues. Sin taxes generally is added to products or services which are supposed as harmful for society. In most cases this kind of tax is added to tobacco and alcohol. Sin taxes should be higher for many reasons. The main motive may be that tobacco tax increases are one of the most effective ways to reduce smoking and other tobacco use, especially among kids; higher taxes also can increase revenue and have supportive impact on health. Tobacco taxation is an essential component of a complete tobacco control strategy. It seems, that in much of the world, tobacco taxes remain low and tobacco is cheap, because tobacco products in many countries have become…show more content…
Some people declare that higher cigarette and other tobacco taxes will support to increased smuggling and associated criminal activity. In territories, where tobacco taxes are higher, they argue, that sales will decrease, but in nearby territories with lower taxes, sales of smuggled cigarettes will increase. Therefore, they state, cigarette consumption will remain high and tax revenues will decline. However, tobacco taxes are not the primary reason for cigarette smuggling and cigarette tax avoidance. In general, more likely reason that causes smuggling may be high degree of corruption in a country, than raised taxes on some products. For example, despite high cigarette prices and some of the highest taxes on cigarettes, smuggling is almost non-existent in Scandinavian countries. In contrast, smuggled cigarettes can be easily purchased in Africa, where taxes are already low and cigarettes are

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