Tax on alcohol

http://www.cnn.com/2010/HEALTH/09/24/health.booze.tax/

This article discusses the effect of increasing taxes on alcohol to reducing the deaths, diseases, car crashes and crimes caused by it. Studies have shown that groups that consume alcohol strongly respond even to the slightest alcohol price increase. And even a small decrease in drinking would make a considerable impact to the health of the users and the public. Not only does this support the fact that states should increase tax on alcohol, but also the revenue could be used for multiple purposes, which creates a “win-win for government”.

 

This article goes well with chapter 6 Tax and Subsidies since it discusses the effect of tax on goods.

1 Comment »

  1. harchikp Said,

    December 14, 2015 @ 11:59 pm

    This is an interesting example of a Pigouvian tax, where the government has access to plenty of other taxation methods to acquire profits, but choose to tax alcohol to serve the public’s interest and promote safety. Pigouvian taxes like this can be used as an important tool the government can use to discourage unsafe practices.

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