A Health Tax on Cigarettes, Alcohol & Sugary Drinks?
- TalkingCircles
- 6 hours ago
- 4 min read
Public policy issues such as this one aren't easy to resolve. This is a discovery that the teens at the Young Writers' Club made last week as they analyzed the matter from different perspectives.
Previously on the Young Writers’ Club, the teen members chose different roles ranging from Public Health Advocate, Finance Minister, Economist on one side and on the other, Industry Representatives and Consumer Advocate, to address the proposition of imposing a health tax on harmful substances such as Cigarettes, Alcohol & Sugary drinks. These tend to strain the public health care immensely and the proposal to impose health taxes as a means curtailing consumption came from the Public Health Advocate. At first glance, it seems like a fine idea. But public policy making is rarely as simple as that. Read details here. Cigarettes, Alcohol & Sugary Drinks. In our previous session, they put their heads down, researched and formed their opinions. This week, they shared their findings and perspectives in an invigorating debate.
Kickstarting the Debate
Alcohol, cigarettes & sugary drinks cause a lot of health problems.This strains the healthcare infrastructure immensely. How about increasing taxes on them, thus making them far more expensive than they are? Health tax is the best way to make sure people stop consuming these harmful substances. - The Public Health Advocate.
“People in withdrawal cannot suddenly stop. Rehabilitation centers help their patients to gradually withdraw. In such instances, the patient is making an effort to change. Asking the patient pay more on account of health tax is unfair? Isn’t it?”
The Finance Minister made a note of this comment right away and passed a statement to the effect that rehabilitation centers will not be taxed.
The Industries Representative went first to express her views on the matter. She highlighted the following for consideration.
Demand for these products is inelastic.
No matter what the price is people will find a way to find money to buy. This is especially true for cigarettes and alcohol.
Unemployment: A health tax will have a serious impact on the businesses in across these industries which will potentially lead to a lot of unemployment.
Illegal smuggling: Given that these substances are addictive in nature, illegal smuggling is bound to occur as shown in history on several occasions. This defeats the very purpose. Worse it impacts livelihoods of many.
It is not just the manufacturers- bars, local shops, restaurants serving alcohol already pay a lot for licenses. On top of that being asked to pay a hefty health tax could ruin them completely.
It is not possible to eliminate sugary drinks entirely...These have been around for generations. Not easy to make them disappear. A health tax definitely will not do it.
The consumer advocate brought forth the consumer perspective:
Personal Freedom and Autonomy
Adults should have the right to make their own choices about legal products, even if those choices carry risks. Excessive taxation is a form of government overreach that undermines personal liberty.
People are well aware of the risks associated with tobacco and alcohol. Treating adults as if they cannot make informed decisions is paternalistic and dismissive of human agency.
Social and Economic Arguments
Most of the costs of drinking and smoking fall on individual consumers, not the public. The economic justification for making smokers and drinkers pay even more is weak, especially when the industries already contribute significant tax revenue.
The alcohol and tobacco sectors provide jobs and economic activity. Excessive taxation risks driving consumers to black markets, which undermines both public health and government revenue.
Quality of Life and Social Cohesion
For many, the enjoyment of a drink with friends or a cigarette during a break is part of daily life and social interaction. Taxing these pleasures out of reach can lead to dissatisfaction and resentment, not a healthier or happier society.
The Finance Minister listened carefully before expressing his views on the matter.
Black markets are indeed an issue. But that is a problem of enforcement not that of tax.
Health tax would not be imposed on rehabs.
The tax is not to judge the consumers- it is still their choice. If they want to spend more for their addiction, it is a personal choice
Win win- boost to revenue and you respect consumer choice- not forcing them to change.
Everyone is not getting taxed- only the ones who are consuming these products.
For a more wholistic perspective, the Economist on the group stepped in to express his views on the matter. He tactfully reminded the group about time periods- short run and long run.
A health tax would lead to rise in revenue for the government in the short run.
It is possible that eventually in the long run, the demand might just come down and overall health is likely to improve.
It is good for productivity in the faraway future. But to expect immediate change in consumer behavior is unrealistic. Even the near short term is unrealistic. This is a change that will cause ripples which will take a really long time to settle.
A conclusion, resolution?
That’s a hard one even for a small group such as ours. One can only imagine what it is like to be a important participant in public policy debate and arrive at a universally acceptable decision. No wonder bills take time to be passed!
Previously published on the Musings from the Young Writers' Club magazine- an exclusive magazine of the Young Writers' Club for Teens at Talking Circles.
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