A couple of years ago, there was a study estimating that if people were to reduce their sugary beverage consumption by around 20%, then the health benefits that they would reap would be something akin to giving them each a check between $100 or $300 each year. On the other hand, from an economist’s perspective, it’s not enough for something to have negative consequences to justify taxing it.
Things like rock climbing have negative health consequences, potentially.
Idaho raked in nearly $36 million in tax revenue from the cigarette taxes last year.
Comparatively, West Virginia’s cigarette tax of $1.20 netted the state around $95 million.
According to the Pew report, even with these economic numbers, states shouldn’t rely on the sin tax to account for revenue.
Nationwide, tobacco excise tax totals totaled .3 billion, while alcohol tax revenue brought in .6 billion.
There’s a growing literature in behavioral economics that studies the tendency for people to underweigh distant consequences and overweigh the upfront benefits or costs of doing something.
This can explain everything from why we save less for retirement than we should or intend to, or why we exercise less than we ought to.
Lockwood recently spoke about their research on the [email protected] show Benjamin Lockwood: Absolutely.
It’s been happening in Philadelphia, and we’ve also seen these implemented in Chicago, San Francisco, Berkeley, Oakland and Boulder, Colorado.