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Raising 'sin' taxes on tobacco and alcohol could help improve public health

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ANI Washington
Last Updated : Jun 04 2013 | 1:31 PM IST

Physicians believe that raising "sin" taxes on tobacco and alcoholic beverages, and imposing them on sugary drinks and fatty foods would lead many people to cut back, improving public health.

Two Mayo Clinic physicians - Michael Joyner, M.D., and David Warner, M.D. - contend that much of overall health depends on behavior and is relatively independent of the health care system.

Risk factors for many common and chronic diseases are directly linked to tobacco smoking, drinking alcohol, eating too much low-quality food and physical inactivity, they said.

"Sin taxes could address three of these four major behavioral determinants of overall health," Dr. Joyner, a Mayo Clinic anesthesiologist and physiologist, said.

"Sin taxes have also been highly effective in improving public health in the past and in the current environment could be structured to raise substantial revenue and prevent both medical overuse and chronic diseases," he said.

Sin taxes have the potential to generate substantial revenue.

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Nearly 80 billion dollars could be generated over the next 10 years by increasing the tobacco tax by 50 cents per pack.

The alcohol tax as a percentage of the total cost of various forms of alcoholic beverages is much lower than it was in 1980. If the alcohol tax were increased to 30 percent of the pretax value of the beverage (it is currently about 10 percent), federal revenues would increase by 25 billion dollars per year (250 billion dollars over 10 years).

The effects of a 1 cent per ounce tax on sugary beverages would raise approximately 15 billion dollars to 20 billion dollars per year (150 to 200 billion dollars over 10 years).

Ideally, these resources could also be used to subsidize care for the uninsured, buffer the fiscal pressures associated with Medicare and Medicaid, promote increased physical activity and better nutrition in the population, build public health infrastructure or perhaps increase federal funding for biomedical research.

One of the major arguments raised against sin taxes is that they fall disproportionately on the poor, who typically engage in unhealthy behaviors at higher rates than other segments of the population.

The authors raise the counterargument that the positive behavioral changes associated with these taxes would disproportionately benefit the poor in terms of both improved health over time and more money to spend on other things.

The findings are published in the journal Mayo Clinic Proceedings.

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First Published: Jun 04 2013 | 12:49 PM IST

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