Last week, Governor Rod Blagojevich announced his new budget for Illinois. His proposal to increase revenue by further increasing taxes on cigarettes by 75 cents has generated much attention from the media. It would bring the state’s total cigarette tax to $1.73 per pack. Calculating in the federal, county and city taxes, Chicago smokers would pay $3.60 cents in taxes per pack of cigarettes.
Cigarettes, alcohol and gambling are commonly sources for state and local governments to generate revenue. A “sin tax”, a tax levied on an item or service regarded as neither a necessity nor luxury, has the additional purpose of serving as a punishment for individuals who engage in activities considered vices. Consequently, it is also intended to act as an incentive to discontinue their “sinful activities”.
However, this puts the state in the contradictory position of professing to discourage certain behaviors while relying on their continuance as a source of revenue. As in the case of cigarettes, many states including Illinois have successfully sued tobacco companies for selling a product that was know to be harmful to our health, but is simultaneously profiting off the same sales.
What are the ethics behind the debate over sin taxes? With the imposition of sin taxes is the government overstepping its authority by defining moral behavior? What are the unintended economic and social consequences? Do sin taxes actually reduce smoking, drinking and gambling? Join us at Cafe Society for a sin-tax-tic discussion!
This weeks articles:
- Proper sin tax?
- Fund cessation programs with cigarette taxes
- Sin Tax Error
- Cigarette Tax Facts, Including Intl, Historical, and State Tables
For more informaiton, please contact Kristin Millikan at 312.422.5580.