My bad, I didn’t realize you were an economist.
Not really. People are irrational actors particularly when it comes to vices like smoking. S&D curves are a good starting point, but they’re not hard science.
What you’re saying is true, but if the demand is perfectly inelastic S&D would still hold while @anon50325502’s statement would still be true.
I think smoking is an argument for inelastic demand because of it’s addictive nature. While S&D is true, it is not like a normal good that can be easily substituted.
Depends on the market distortions vis a vis black market effects. Are you considering availability of “sin” goods and services available outside of taxed markets? A very lucrative and organized industry exists to capture the demand you’re assuming is lost due to the sin tax.
The point is not as many people are priced out of or deterred from these goods/services in real terms. As long as there’s demand, someone will be there to capture it, market distortions be damned.
I’m not saying that it scales the exact same way as every other product. I’m just saying that in an industry that pulls in billions annually, the odds of the entire market completely ignoring an increase in prices is extremely unlikely.
I’m beyond comfortable with the notion of higher prices = lower demand as an iron rule.
Which I get. But you can’t increase the prices of something that requires billions of units sold and see no shift in consumption.
Well, maybe you can. I’ve just never seen a single piece of evidence that points to it. Maybe in a pure social state I guess.
As usual (lol), you seem to be fixated on the micro while I’m looking at this in the aggregate. In other words, sure, consumption will probably change for some, but not in a material way in the macro sense.
I can’t think of a single economist that see this as an iron rule. @Drew1411 already touched on why that is.
No I think you’re right, there will be change in consumption … not necessarily a shift (I tend to think of economic shifts on the S&D curve with S or D shocks - taxation doesn’t cause shocks but moves market clearing up or down wrt price - just semantics but I get what you’re saying).
But retail price is a small piece of that and the change in demand may be less than what is measured due to black market effects (ignoring substitution effects and only focusing on the good in question - things can get messy when considering the alternatives and I don’t think will help the conversation).
EDIT: also to your previous point of pricing people out of the market and it’s affect on low income consumers - I think you should take a look at who is the main consumers of these goods in terms of income buckets and proportion of income spent on these products and the effect a sin tax has on consumption among these segments. I’m not sure of the exact outcomes, but from what I’ve seen in my family and community, it doesn’t have the desired effect (steering behavior away from products deemed harmful) but only captures a greater portion of lower income consumers’ “disposable” income.
Taxes intended to change habits are eventually compelled by force. At some point consumers will find a way to get what they want. Sometimes this happens…Killing of Eric Garner - Wikipedia
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This is exactly what i was alluding to. Black markets exist for a reason and when the state doesn’t get their cut - well, it tends to get messy and some very undesirable, unintended consequences occur.
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I’m fixated on the exact opposite? S&D shifts on something of this magnitude can only really be seen in a macro sense. Micro changes from something like this are near invisible.
I’m not an economist 
While I understand that black market effects need to be taken into consideration to see the final result, I’m personally of the opinion that it should be given zero regard when forming policy decisions.
“Criminals are going to do it anyways” has always been a bit of a nonstarter for me re: making policy.
Which, imo, is Darwin-ism in action. I don’t think people can be saved from themselves if they genuinely don’t want to be.
Only if the taxes weren’t successful in changing habits.
So, you’re all for the state capturing a higher proportion of low income consumers’ disposable cash then?
I’d imagine taxes are rarely successful in changing habits to the point that this line of thought is an exercise in futility. These goods are seen as “bad habits” or “habit forming” which no level of taxation to the point of outright prohibition will change habits (there’s a reason Rum Runners like Kennedy and Capone were very very successful) and there’s a reason, as pointed out before, Eric Garner is no longer with us. People with these types of habits and behaviors will do what they need to do to scratch that itch which includes ignoring tax laws. Again, the amount of people these sin taxes deter is laughable to the point that steering behavior as a policy goal is only lip service on a macro level (as pointed out by USMC).
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Of course not. I would be much more in favor of people not spending their disposable income on things that actively kill them instead of finding a way out of the economic hole they’re in. But if they’re going to insist on feeding the govt their money, I’m not really in a position to do anything but laugh at them.
Do you have a quantifiable way to show that’s the case?
Not readily available, no. Do you have quantifiable evidence to show that the sin tax actually deters consumption?
From the UK where sin taxes are way higher: “Sin taxes hit moderate and heavy users alike. Research has shown that previous rises in cigarette tax have made only 2.3% of smokers quit, with the other 97.7% just paying more in tax.”
Also found a really cynical article by huffpost that saving smokers and alcoholics from themselves costs us MORE in healthcare expenses than letting them die early. They looked at the cost of cancer treatments vs the cost of hip replacements and long term care if non-smokers make it to their 70’s or 80’s.
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This is an example of why I love economists lol
My uncle moved from OH to NY and spent a decent amount of time bitching that he couldn’t afford as many cigs anymore. Does that count?
In a macro sense, I do not have direct evidence the sin tax lowers consumption.
2.3% of users quitting or 2.3% of consumption lowered? Either way I guess it’s a quantifiable way that consumption decreased, but I’d still be interested to know which it was.
This one always gives me conflicted feelings. Sometimes I feel like we shouldn’t make drugs/alcohol “illegal” but you should have to forfeit your rights to social assistance that helps you recover from alcoholism, lung cancer from smoking, etc.
lol … not really, no. I have anecdotal evidence that suggests some people see cigs and the such as necessities and will forego things like heat and a meal in lieu of their next pack - I see “homeless” panhandlers puffing on butts on the regular…
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As a limited government guy I think about the Machiavellian way to reduce population. Just make all drugs legal and stop administering Narcan.
There were roughly 60k fatal overdoses in 2016. Legalize it and stop saving the overdosers… I’d bet that number would be north of 180k fatal overdoses.
Now the only question is can we kill off addicts faster than we can make new ones. Problem solved.
Which is evidence of what? That not everyone was priced out by the sin tax? I’m still struggling to see what the existence of current smoking proves other than “sin tax didn’t price them out of the market”
wellllllll. the other question would be how many children die from it. As much as I’d like to just let drug addicts flatline, I fall back to the classic “think of the children”
Okay, well then I don’t know what you’re talking about. I am not aware of a Sin Tax shifting the S&D curve in a meaningful way.
Man, color me surprised…