week 8

Taxes on Alcohol and Tobacco

Kesha Harper

Professor Catherine Cousar

ENG 215

August 16, 2017

Taxes on Alcohol and Tobacco

Goods deemed to be harmful to the society ranging from tobacco, alcohol, gambling, cider, wine among others are subjected to a sin tax. A sin tax is an excise tax that is specifically imposed on services such as gambling viewed as defamatory in society. The government sanctions these commodities for the purposes of alluring duties, an important part of most states' economies. Revenue taxes from these commodities are used to generate public revenue. These proceeds are of essence foresees the government help in funding special state projects, cracking medical expenses as well as funding education programs among other projections.

The Internal Revenue Service (IRS) collects taxes on alcohol and tobacco as these assesses are deliberated as income. Alcohol duties are admitted in the price one pays for beer, perry or cider, wine, and spirits. Tobacco Duty, on the other hand, is admitted in the price one pays for cigars, cigarettes and other various tobacco products (Graves, 2000).

Regarding an analysis on sin taxes on alcohol and tobacco, "The revenue lost to the illicit trade could fund a modest but much-needed tax cut for millions of families while preventing smugglers from profiting because of deeply regressive 'sin taxes' which hit the poorest hardest. It is high time the Government offered struggling taxpayers a better deal instead of kowtowing to the self-appointed lifestyle police who remain oblivious to the cost of ever-rising duties on ordinary taxpayers" (Graves, 2000).

In the United States, alcohol and tobacco are items that are used together. Studies show that people who smoke cigarettes and various tobacco products are more than likely to drink and people who drink are much more likely to smoke. Likewise, the dependence on tobacco and alcohol is correlated. People who depend on alcohol are three times most likely, in the general population to be smokers, and people who depend on tobacco are four times most likely to depend on alcohol. However, the government imposes taxes in this both alcohol and tobacco as an aid in contribution to the country’s’ revenue.

The government, through the IRS, ensures adequate support to projects as a vantage to the reward on these proceeds. The US defense has is a beneficiary of the expenditure on the military as well as national defense. This outlook consists of adequate protection of the country as well as ensuring there is civil rest positively for economic reward. Nevertheless, this expenditure does not enumerate spending on veteran’s welfares. The benefits for veterans who have served the military include medical care and pensions and are seen to have steadily increased in recent years. According to the Department of Veterans Affairs, there exist roughly 22 million veterans in the United States.

The Healthcare system also inhibits as a benefactor to these taxes that are imposed on sin tax goods, specifically alcohol and tobacco. The high health care costs within the United States are regulated through Medicaid, the government’s health insurance program for the poor. Also, programs such as Consumer health programs and Children’s Health Insurance Program are funded. This aids at a social aspect, besides economic and political environs as well.

Through general taxation, the IRS ensures for Income Security. This includes the retirement and the disability benefits for job training programs, federal employees, and other similar programs. The government is also able to provide temporary assistance to Needy Families program, which provides cash benefits and other support to the poor.

According to the IRS, Education sums up to 3% of the governments’ tax beneficiary. Through this government allocation, the Education system is able to carry out its function backing up of educational researchers and innovations though people will feel better about funding education rather than defense irrespective of the numbers that are depicted from the defense system.

Consequently, sin taxes contribute to the wider revenue contribution allocated on the federal budget in enabling the United States to cater for Foreign aid programs. According to a survey, “Many people believe the government spends a lot and the average American guessed 31% of the federal budget on foreign aid.”

Medicare is also a beneficiary to taxes implications on a sin tax. Through these taxes, it is noted that Medicare constitutes of about 15% of the federal budget. Health care-related expenditures are continuing to billow over the coming years requires for regeneration and improvement. Medicare is incredibly important for the huge portion of the American population and the high medical expenses seems to be a pinch to the larger American population.

However, the IRS, allows an individual to deduct qualified medical expenses that exceed 10% of your adjusted gross income for the year. This is an individual’s taxable income without any alterations to income such as contributions to an Individual Retirement Account, student loan interest, and deductions.

Consorting to a report on IRS, “the IRS allows you to deduct preventative care, treatment, surgeries and dental and vision care as qualifying medical expenses. You can also deduct visits to psychologists and psychiatrists. Prescription medications and appliances such as glasses, contacts, false teeth and hearing aids are also deductible.”

The IRS also lets an individual deduct the expenses that he/she pays for travel for medical care such as bus fare, parking fees and mileage on a car.

Irrespective to the governments’ gain in economic benefits through taxation, it is necessary to offer a resolution to gambling. As it is seen, gambling is inevitable and is considered a vice in society. It is therefore important to understand that the addiction to gambling is real, and its consequences are as well as tragic, just as of alcohol and generally drug abuse.

The American Medical Association and the American Psychiatric Association recognizes general alcohol and tobacco abuse as a correlating social vice. According to a recent report by Frank J. Chaloupka, the use of tobacco in the United States is alarming comprising of an adult smoking prevalence of 22.8%, a youth smoking prevalence of 28.5%, having more than 40% of adult smokers trying to quit in the pasts year a population comprising of more than 70% saying they would want to quit smoking.

In his report, he also ascertained that smoking in the United States was slightly declining over the past two decades and also becoming more concentrated in the lowest income, who are, the least educated segments of the population. Youth smoking arising much of the 1990s and fallen in recent years. Also, the use of tobacco is rising in many developing countries.

On the other hand, the use of alcohol in the United States incorporates an adult drinking prevalence of 64%, a youth drinking prevalence of 73%, college student drinking prevalence of 81%. Close to a half of all alcohol consumed by 10% of those who drink most frequently and heaviest drinkers. Also, there is a moderate downward trend in drinking among the adult population. Notably, drinking among the youth and college students is not changing much in the recent years.

The consequences of tobacco use are fatal and stand out as the leading causes of the preventable death across the United States. Over 440,000 deaths are caused by the use of tobacco each year and globally’ estimates suggest that nearly 5 million premature deaths are depicted from tobacco each year. The exposure to the second-hand tobacco smoke ensues over 3,000 annual lung cancer associated deaths and over 50,000 deaths are noted from cardiovascular diseases.

Also, the consequences of use ascertain as a major cause of preventable death in the United States with over 100,000 deaths each year. Nearly 60% of diseases are caused by or related to the use of alcohol. Over 40% of these deaths are related from violence, accidents and other outcomes that result from the use of alcohol. The Consequences of alcohol results to violence such as rape, homicides and assault, suicides, traffic crashes, family instability, property crime, poor educational outcomes among the youth, lost productivity, sexually transmitted diseases, workplace accidents among others.

Basing on economic impact, tobacco’s estimated economic cost is $150billion per year having $75.5 billion on medical care costs, $81.9 billion in lost productivity and $7.18 per a pack of cigarettes that is sold. Contrastively, alcohol’s estimated economic cost comprises of $166.5 billion per year having substantial costs inflicted on non-drinkers ranging from violence, traffic crashes, and other consequences.

The link between tobacco and alcohol has an authoritative implication for those in the field of alcohol treatment. Many alcoholics also smoke and thereby putting them at a high risk for tobacco-related complications as well including lung disease, multiple cancers, and heart disease such as cardiovascular disease. Statistics propose that more alcoholics die of tobacco-related illness than the deaths from alcohol-related problems. It is therefore needed for an intervention of these co-occurring addictions. An effective treatment hinges on a clear and better understanding of how these substances along with their addictions interact (Nikolaou & Birkbeck College, 1989).

Due to the unwholesomeness and mortality associated with both alcohol and tobacco abuse, it is very important to address these addictions. Addiction in these co-relating vices is no doubt associated with disorders. The treating of co-occurring disorders remains a challenge, and all the same, evidence suggests that combining of these treatments might be one of the most effective ways to address concurrent addictions. Depressed adolescents and patients, denotes additional challenges, but research is exploring ample strategies in targeting these groups (Lesch, 2011).

An essential strategy to this social correlating ill is the preventive measure. This involves a system of self-control urges to the societal vice. This can be advocated through sticking with an individual treatment plan and monitoring cravings. Though it might seem like a recovered appendage and thereby not take measure to stay drug-free, the chances of staying drug-free will be much higher if one continues seeing his/her counselor as well as going to distinct support group meetings and also taking prescribed medication. Avoiding high-risk situations is also advised notably by staying away from old drug crews. These, but a few can ideally act as a controlling measure to this alcohol and tobacco urges (Limeback, 2012).

In conclusion, alcohol and tobacco duties are ascertained as essential in government revenue. Concurrently, it is also viewed as a vice inevitably taking an ill-timed course contributing to negativism with respect to social ills and bad culture. The solutions are nevertheless found to take a controlling course in slowly amending the deceitful culture. Some of this imposition might seem like strong medicine, but then again, we are presenting a very severe societal illness that if adequate laws and measures won’t take effect, the society is going to strive of doom. But then again, the culture that sees young individual striving in these negatively related vice is damned and the country will adequately strive for the better.

References

Graves, B. B. (2000). Alcohol use and abuse. Mankato, Minn: LifeMatters.

Graves, B. B. (2000). Tobacco use. Mankato, Minn: LifeMatters.

Nikolaou, A., & Birkbeck College. (1989). Harmonisation of tobacco and alcohol taxes in the EEC and the welfare of Greek consumers. Birkbeck College, Department of Economics.

Lesch, O.-M. (2011). Alcohol and tobacco: Medical and sociological aspects of usage, abuse, and addiction. Wien: Springer.

Limeback, H. (2012). Comprehensive preventive dentistry. Ames, Iowa: Wiley-Blackwell.