Book
Mikesell John (2019). Fiscal Administration: Analysis and Applications for the Public Sector, Cengage. 10th edition. ISBN-13: 9781305953680
You can use Eighth edition or Ninth or Tenth edition of this book.
In an operational sense, a student contributes to a positive learning environment by:
Being an active participant, but not a dominating participant.
Being a good listener and demonstrating respect for others’ opinions.
Making thoughtful, insightful comments.
Building on others’ comments.
Asking questions, not just giving answers.
Identifying key assumptions underlying discussion points and arguments.
Judiciously playing the role of the “devil’s advocate”.
Being constructive and positive in one’s comments.
It is strongly recommended that students identify key discussion points associated with each discussion. These discussion points can take any of several forms including, for example, observation from real situation or from article or report, or your personal thoughts and observations that build on.
Your discussion grade is evaluated on its content, which is a demonstration of course knowledge and analytical abilities. I consider your posts on the average over the course of the module week so you want each post to be substantive. You will want to strive for thoughtful and thorough posts every week that engage with other classmates, demonstrate understanding of concepts, support points with effective reasoning, build upon knowledge from previous weeks, and reference assigned readings.
Answer these questions
Every state and Washington, DC, have different “sin” taxes, for example selective sales taxes on alcohol and tobacco
https://usafacts.org/articles/sin-taxes-by-state-where-do-people-pay-the-most-and-least-in-alcohol-and-tobacco-taxes/
Why do federal and state governments tax “sins” (cigarette, marjuana, etc. )?Is it because sins are inherently bad and lawmakers feel the need to protect us from them?Is it because lawmakers know people will always sin, and therefore sin taxes are a surefire source of revenue? Do sin taxes protect us from ourselves, or exploit our weaknesses, or both? What do you think, would local governments and state governments use more sin taxes or less?
Respond to this post
The sin tax is an established tactic for government to raise additional revenue whilst not offending the voting public. Sin taxes, also known as sumptuary or vice taxes, are excise taxes specifically levied on certain goods deemed harmful to society and individuals. These taxes are imposed on items such as alcohol, tobacco, drugs, candies, soft drinks, fast foods, coffee, sugar, gambling, and pornography. All the “bad stuff” people consume. The authors noted “The best examples are taxes on tobacco products and alcoholic beverages: the prices paid to producers do not reflect the social cost of product use and abuse in terms of damage to health, property, and families.” (Mikesell.2017, p. 473).
For example, higher cigarette taxes might deter smoking, leading to better public health outcomes by reducing smoking-related illnesses. However, a smoker will travel out of their way to find an establishment to buy cigarettes with the least taxes. A person who resides in Chicago, Illinois, a smoker, will travel a short distance to Hammond, Indiana to buy a carton of cigarettes to save on taxes. (See Ex. A 2023 Cigarette Tax Difference.) Adversely, it is observed that sin taxes exploit our weaknesses. These taxes target addictive substances or behaviors, knowing that people may continue to consume them despite the higher prices.
Ex. A
States
2023 Cigarette Taxes
Illinois
Cigarette tax is 1.98 per pack containing 20 cigarettes, 36% of wholesale prices for tobacco products besides cigarettes.
Chicago has an additional $1.18/pack tax on cigarettes, plus $3.00 for Cook County, making it one of the most expensive cities to buy a pack in the United States.
Indiana
Cigarettes is based upon the size and weight of the cigarettes and varies from 99.5 cents per pack of 20 cigarettes to $1.32 per pack of cigarettes, cigarette papers are taxed at 0.5 cents for 50 or less papers, 1 cent for 100 papers, and 0.5 cents per every 50 papers over 100 papers, a 1 cent per 50 tubes tax and a 24% of wholesale tax on tobacco products.
Per the Cato Institute in 2022, cigarettes account for eight percent of households are responsible for virtually all purchases nationwide. A relatively small set of households purchase large shares of multiple sin goods, sin tax burdens are highly concentrated. As a result, sin taxes may dispositional affect low-income citizens. When a higher percentage of someone’s income goes toward sin taxes, it can highlight economic disparities. For example, cigarette taxes hit low-income smokers harder than wealthier ones.
I believe state and local government use less of these taxes as they are not predictable or reliable to balance a budget. While sin taxes generate short-term revenue, they may lead to increased expenditures. The legislatures need to be mindful when taxing these “sin” items and their long-term effects. Budget shortfalls can arise if reliance on sin taxes becomes unsustainable. These forms of revenue raising do not amount to a large part of government finance. The government’s long history of sin taxes has not discouraged excessive consumption deemed unhealthy or safe for the public. Taxes collected by these agencies have little result of rehabilitation, curbing behavior or improving health. Lastly, sin taxes are not paid fairly by every household thus tax collection is concentrated to a selected few. This creates a huge disparity and less access to resources to help with their addictions. If folks can afford to sin, they will no matter what the government says.
References
Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public
sector. Tenth edition. Boston, MA: Cengage Learning. (pg.473).
Retrieved from: www.salestaxhandbook.com.
Retrieved from: www.corporatefinanceinstitute.com/resources/accounting/sin-tax.
Retrieved from: www.cato.org/research-briefs-economic-policy/who-pays-sin-taxes-understanding-overlapping-burdens-corrective