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‘Sin Tax’ Costs Outweigh Benefits

The Independent Institute

By William F. Shughart II, Adam J. Hoffer, Michael D. Thomas

Burdened by unfunded public pension liabilities and healthcare costs, state and local governments are in bad shape, considering the willingness of voters to embrace new spending proposals and their general reluctance to pay taxes to finance them.

Responding to the latest round of public budget “crises,” policymakers around the country have begun reviving an old, but not necessarily good idea with added enthusiasm—taxing “sin.” What better way to raise revenue than to find something that your neighbor buys or an activity he engages in that you don’t like and tax it?

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